Further and Higher Education Bill [H.L.]

HL Deb 21 November 1991 vol 532 cc1019-125

3.35 p.m.

The Paymaster General (Lord Belstead)

My Lords, I beg to move that the Bill be now read a second time.

Since the Government took office, we have introduced a substantial programme of educational reforms with the resolve of achieving yet higher standards throughout the education service. The Parent's Charter spells out the Government's aim in particular to widen choice and to strengthen the partnership between parents and schools. The national curriculum is greatly increasing the motivation of young people in schools. For those leaving school, a new and clearer system of vocational qualifications is beginning to open up new opportunities. The Bill is an integral part of our programme to try to raise standards and increase choice.

The Bill is also the latest in a line of reforms designed to improve management and devolve responsibility to those who are in the business of running schools and teaching in schools. The Government's education management reforms have their roots in the Education Act 1986 which provided for the greater involvement of parents and expanded the role of parents on school governing bodies. That set the framework for the next step in the Education Reform Act 1988; namely, the introduction, through local management, of devolved budgeting in primary and secondary schools. That Act also took the logical end point along the road of greater devolution: the self-managed status of grant-maintained schools, operating independently from local authorities but still within the state sector. That is a sector which is growing steadily as more and more schools feel ready to take that final step of self-determination.

In a parallel move to the reforms taking place in schools, the Education Reform Act also introduced local management of colleges to allow the FE institutions more freedom of devolved management. The Act took the final step of taking the polytechnics and higher education institutions out of local authority control, giving them freedom within the new PCFC sector. We believe that the time has now come to take that same step for the FE colleges. So the Bill builds on the changes introduced by the Education Reform Act. When I say that, I am referring to Part I.

The Bill provides a legislative framework for the reforms set out in the further and higher education White Papers launched by my right honourable friend the Prime Minister on 20th May. They are far reaching reforms designed to provide a better deal for young people and adults and to increase still further participation in further and higher education.

Education up to 16 provides the essential foundation for subsequent study and for employment; but what happens after 16 is critical to ensuring a well-prepared and adaptable generation with up-to-date skills and knowledge appropriate to the next century. The reforms embodied in the Bill will establish a new statutory framework for further education and give it a new coherence. They will transform post-school education and training and give it the recognition that it deserves. By doing so, the Bill will increase participation by young people and adults at that critical level of education.

I would not stand before your Lordships today and say that participation rates in further education after the age of 16 are entirely as they should be. But there has been a continuing and dramatic rise in the numbers of young people staying on in full-time education and training. Sixty per cent. of 16 year-olds in England did so last year. Twelve years ago it was 41 per cent. I am glad to say that participation has increased by four percentage points in each of the last three years and the evidence suggests that there has been a further increase this year. In addition, 30 per cent. or so of 16 year-olds take part in some form of part-time education or training.

In higher education, the Government's policies and the efforts of universities, polytechnics and colleges have succeeded in achieving efficient expansion alongside improvements in quality. There are now more students in higher education than ever before. Participation of one in eight of the relevant age group a decade ago is now close to one in four. Alongside traditional courses there is now a much greater diversity of courses and greater flexibility of attendance.

Our policies for further and higher education are aimed at continuing those advances, as well as attracting more adults back into education. Indeed, participation must continue to rise if our young people and adult citizens are to develop to their full potential and if we are to be truly competitive in world markets. That poses a great challenge as well as an opportunity for the education system.

Our reforms of further education are designed to enable colleges to respond with even greater flexibility and speed to changing demands from students and to the needs of the labour market. The Education Reform Act gave colleges greater managerial autonomy and they are recruiting more students. But they lack the full freedom which we gave to the polytechnics and higher education colleges in 1989 to respond to the demands of students and of the labour market. We are therefore proposing in the Bill to take further education and sixth form colleges out of local authority control and transfer them to a new sector which will be funded directly by new further education funding councils in England and Wales. Our aim is to give colleges much greater freedom to manage their own affairs and, through the funding regime, a powerful financial incentive to recruit additional students and thereby expand participation. It is significant that those changes have been widely welcomed by the colleges.

We have resolved to set up the new further education funding councils as soon as possible after the passage of the Bill so that they can prepare for the transfer of colleges out of local authority control on 1st April 1993. We are determined to build on the achievements of the past few years in further education and to release the potential that exists to provide more and better quality education. The reforms are directed not only at structures but also at qualifications. We are in the process of creating a comprehensive and coherent national framework of vocational qualifications. We aim to establish parity of esteem between the academic and vocational route so that young people and adults can pursue the kind of education that best suits their needs.

While under the Bill sixth form colleges will transfer to the new sector, school sixth forms will remain where they ire at present, whether under local authority control, assisted by local authorities or in the grant-maintained sector. The Government are resolved to see good sixth forms continue and to encourage choice between schools and colleges wherever possible. Moreover, under the Bill school governors will be able to admit part-time students over 16 and full-time students aged 19 or over so long as they are not taught alongside pupils of compulsory school age.

The new sector will embrace many different kinds of colleges. The Government see strength in diversity and fully intend that colleges should be able to preserve their particular characteristics so long as there is continuing demand for what they offer.

The new further education funding councils will be responsible for securing adequate provision of many kinds of courses, including courses leading to academic and vocational qualifications, courses enabling adults to gain access to higher education, return to learn courses and basic skills courses. Those courses will not only be provided in the FE colleges themselves but may be supported through the colleges in a wide range of locations, including LEA adult education centres and schools. Local education authorities will retain their duties for all kinds of further education for adults which do not fall to the duty of the funding councils; and those courses—I emphasise this—will continue to be supported from public funds.

The aims of our further education reforms in Part I of the Bill can be summarised briefly: more and better education for 16 to 18 year-olds and for adults; increased participation and increased levels of attainment by young people and throughout the population.

When your Lordships debated the higher education White Paper earlier this year, there was widespread agreement with the Government's view that the formal distinctions between the universities on the one hand and polytechnics and colleges on the other have become increasingly artificial and are an obstacle to further progress. The higher education reforms in Part II of the Bill effectively end what we now know as the higher education binary line.

The Bill introduces a single funding structure for universities, polytechnics and colleges of higher education through the establishment of separate higher education funding councils for England and Wales. Perhaps I may add that the funding councils in both sectors will be appointed by the relevant Secretaries of State. A Scottish council is proposed in the parallel Further and Higher Education (Scotland) Bill. The councils will be responsible for distributing public funds for both teaching and research among all higher education institutions in their areas. A new responsibility for the councils announced in the higher education White Paper will be that of providing for quality assessment in those institutions that they fund.

The Government intend to set up the higher education funding councils as soon as possible after the passage of the Bill to enable them to prepare a methodology for allocating funds to institutions for 1993–94 and to bring together other aspects of the work of the present funding councils. The new councils will take over this role from April 1993. The UFC and PCFC have prepared a comprehensive and carefully thought-out action plan for managing the transition to the new arrangements and are publishing it today. I am pleased to announce that Sir Ron Dearing, currently chairman of both the Polytechnics and Colleges Funding Council and the Universities Funding Council, has been appointed chairman designate of the Higher Education Funding Council for England for an initial period up to 1st April 1994. His appointment will provide continuity and help to ensure that the transition is managed as smoothly as possible.

Implementing other significant proposals in the White Paper in Part II the Bill provides also for higher education institutions other than the present universities to be granted degree awarding powers by order of the Secretary of State and to adopt a university title with the approval of the Privy Council. The higher education White Paper announced that that new flexibility would extend to all polytechnics and possibly to some other institutions. The Department of Education and Science issued a consultation paper at the end of October proposing separate criteria for the extension of degree awarding powers and university titles beyond the present polytechnics.

I should like to pay tribute to the achievements of the Council for National Academic Awards over the past 25 years. It has succeeded in bringing the polytechnics and colleges sector to a position where degree awarding powers can be extended and where the Government can with confidence look to institutions to propose their own arrangements for auditing institutional quality controls. Accordingly, the time has come to wind up the council; and the Bill provides for its dissolution.

This reform is about enabling all higher education institutions to build on their distinctive strengths. It is about paving the way for the further expansion of high quality higher education, benefiting both individuals and the country alike.

I turn now to the Bill itself. Part I deals with the further education reforms, Part II with the higher education reforms and Part III with some miscellaneous and general provisions.

Clauses 1 to 11 deal with the new structure of responsibilities for further education. Clause 1 and Schedule 1 establish the further education funding councils for England and for Wales which will be responsible for funding the new further education sector. The funding council for England will have a number of regional committees which will advise the council on local needs.

The new funding councils will have a duty to secure provision for full-time education of 16 to 18 year-olds. This is set out in Clause 2. They will also have a duty under Clause 3 to secure provision for part-time education for those aged 16 and over and full-time education for those aged 19 and over of a kind which falls within the categories set out in Schedule 2 to the Bill. These include courses leading to vocational and academic qualifications and certain other types of course. The duty to secure provision for courses which do not fall within the scope of the schedule and for the youth service will remain with local education authorities under Clause 11.

The new funding councils will have responsibility for funding full-time provision and other eligible courses of the kind I have just described in institutions within the new further education sector. There are two ways in which institutions can come into the new sector. The first is by a process of incorporation, which is dealt with in Clauses 15 to 19. This means that the colleges will be legal entities in their own right, independent of local education authorities, with the power to employ their own staff, to enter into contracts on their own behalf and to manage assets and resources. They will be eligible for incorporation if they satisfy certain qualifying criteria in respect of the proportion of their work that is eligible for funding by the new funding councils.

The second route of entry to the new further education sector is through designation by the Secretary of State by order. The institutions to be designated as eligible to receive funding from the funding councils will be voluntary aided sixth form colleges and certain other bodies, including the long-term residential colleges for adults, four adult colleges in London which have a regional role and the Workers' Educational Association.

I have not yet mentioned the position of young people with learning difficulties. Clause 4 is the key clause here. It requires the new funding councils in fulfilling their duties to have regard to the requirements of persons who have learning difficulties. Where the duty to provide further education is not transferred to the funding councils, local education authorities, like the councils, will be required to have regard to the needs of persons who have learning difficulties in making provision. The existing duties towards these students are thus continued.

Clause 48 requires the governing bodies of colleges in the new sector to publish information about educational provision made or proposed for their students, educational achievements, including examination results, and the careers of their students after completing any course or leaving the institution. The Government intend that this information should be published in a form which facilitates comparisons between colleges.

I come now to the higher education clauses of the Bill. Clauses 58 to 60 provide for the new higher education funding councils for England and Wales to take over from the Universities Funding Council and the Polytechnics and Colleges Funding Council. Clauses 61 to 66 set out the main responsibilities of the councils. The majority of these provisions replicate those already in the Education Reform Act 1988 in respect of the UFC and the PCFC. I should note two extensions. First, Clause 61 provides that the Open University may be funded by both councils. In practice the university will probably receive its general funding from the higher education funding council for England. However, your Lordships may wish to discuss that matter in Committee. Secondly, Clause 62 requires the councils to have regard to the desirability of maintaining the denominational and the distinctive characteristics of the institutions they fund. That provision was not included in the Education Reform Act.

Clause 64 and the related Clause 77 define the Secretary of State's condition and direction-making powers in respect of the new councils. The new clauses do no more than retain the careful balance of responsibility between the Secretary of State, the funding councils and institutions which your Lordships debated extensively during the passage of the 1988 Act. However, I am aware of the sensitivities which surround Clause 77. The prime consideration must be that the Government retain a reserve power over public funds for higher education in exceptional circumstances. Those funds are enormous. It is not easy to envisage how the clause could be amended in such a way as to retain that provision. Nevertheless I give your Lordships an assurance that I shall listen carefully to the speeches made today. The Goverment are prepared to consider the views of noble Lords not only today but as regards any amendments that may be proposed at later stages of the Bill.

Clause 65 places a duty and confers a power on the councils to provide information or offer advice to the Secretary of State. Clause 66 provides for the quality assessment arrangements announced in the higher education White Paper. Clauses 67, 69 and 71 provide for the Privy Council to take over the present responsibilities of the Secretary of State in respect of the instruments and articles of government of existing polytechnics and colleges. The Bill removes the automatic right of local education authorities, staff and students to be represented on governing bodies, while leaving it open to each individual governing body to include members with these backgrounds if it wishes. Clauses 72 and 73 give effect to the policy on extending degree awarding powers and university titles to which I have already referred.

Clause 76 empowers the Secretary of State, by order, to provide for the dissolution of the CNAA. Clause 78 includes the reserve power for the Secretary of State, signalled in the higher education White Paper, to ensure there are new quality audit arrangements in higher education. It is not a power which he expects to have to use, following initial proposals which he has received from the Committee of Vice-Chancellors and Principals, the Committee of Directors of Polytechnics and the Standing Conference of Principals. These proposals deal with how a new quality assurance unit, owned by higher education institutions collectively, might help to support and enhance quality in institutions.

There is a number of complex clauses in this Bill, to put it mildly. When we examine them in Committee, I ask noble Lords not to forget the general principles underlying the clauses. The new framework set out in this Bill will enable institutions to offer more opportunities for young people and adults to develop their potential. The reforms will equip more people with stronger basic skills and more high level skills. They will help to bridge the traditional academic and vocational divide. That will bring benefits to the individuals who study, to their employers and to the economy and our society as a whole.

The removal of barriers in both further and higher education will enable both sectors better to face the challenges of providing high quality education and training for young people and adults so that they in turn can help the country to meet the challenges facing us as we move towards the 21st century. I commend the Bill to the House.

Moved, That the Bill be now read a second time. —(Lord Belstead.)

4 p.m.

Baroness Blackstone

My Lords, perhaps I may begin by saying how much I am looking forward to the maiden speech of the noble Baroness, Lady Perry. She is a great expert on the subject before us today and we shall all benefit from what she has to say.

Education after the end of school is an increasingly important part of the system for educating our people. Thirty years ago only a small proportion of the population received any post-school education and only a tiny minority went into higher education. Today the position is different. There has been a large expansion of further and higher education over the past three decades and there is now a clear recognition across the political spectrum that a large further expansion is needed, both to allow our people to achieve their potential and to improve our economic performance.

The recognition of that fact by the government side has come a little late. Amazingly, 10 years ago the then Conservative Secretary of State for Education was busily cutting back numbers in higher education. However, we can now all agree that we must try to catch up with our competitors in Europe and elsewhere by giving far more people the opportunity to continue their education after they have left school and to return to it later in their lives as adults.

The Bill we have before us today is therefore of great importance because it will provide the legislative framework which shapes the expansion of our system of post-school education in the years ahead. If we create structures today which are inadequate for the task ahead we shall undermine the achievement of the central goal on which we all agree—that we must have a better educated and trained population.

Let me say immediately that there are substantial parts of this Bill which are welcome. Indeed, some parts of the Bill will implement what has been Labour Party policy for some time. We are delighted to see that the Government have recognised that their previous thinking was wrong and come round to our point of view.

I refer in particular to the decision to remove the binary line between polytechnics and universities and to create single funding councils for higher education in England and Wales. Some of your Lordships may remember that we on this side of the House put down amendments to the Education Reform Bill to achieve that, but at that time the Government failed to see the value of such change. We are pleased that in this Bill the Government recognise that polytechnics are academically mature institutions meriting the title of university although having a different and distinctive mission from that of existing universities. That will lead to some redefinition and broadening of the idea of the university in British higher education, but that is something which we also welcome.

We further welcome the opportunity that it gives to plan higher education across the binary line, region by region. A unified system of higher education should be better placed to meet the great challenges which expansion poses at the same time as allowing diversity within the new structure.

I now turn to further education, on which unfortunately we are unable to support the changes the Government propose. When the White Paper which preceded the Bill was published we made it clear on this side of the House that we considered that the decision to remove FE from local government was little more than a cynical way of taking over £2 billion out of local government expenditure to help the Government over their problems with the poll tax. I repeat today that that was unquestionably the Government's main motivation in introducing that change.

Desperately trying to justify the change, the Government have used the analogy of the polytechnics being taken out of LEA control by the 1988 Act. That is a false analogy. The polytechnics are large, national institutions. Some are now considerably larger than many universities. They draw a substantial proportion of their students from all over the country and increasing numbers from abroad. By contrast the FE colleges are local institutions. Their 16 to 19 year-old students mainly live at home; their part-time adult students are in local employment; and their married women students who are returning to study are also locally based. Thus the colleges serve a local population and, with respect to their training needs, local employers.

When the polytechnics were removed from local authority control there was a substantial period of time during which the national advisory body on higher education helped to prepare them for their new status and establish a common funding basis. The further education sector will not have the advantage of that experience. The new funding councils will instead have to start from scratch, devising new funding mechanisms for well over 500 local institutions. No, my Lords, the comparison with the polytechnics is spurious, and it is time the Government stopped using it.

It would also be more honest if Ministers stopped suggesting that the polytechnics have suddenly been set free to expand, thereby meeting the nation's need for higher education places. The truth is that the polytechnics expanded greatly and developed many exciting new courses under LEA control. The Government will not admit that because they are pursuing a vendetta against local government and want to go on eroding its powers and reducing its functions. That, rather than good educational reasons, is why the Government are taking further education away from the local authorities.

Conservative councillors all over the country are increasingly disillusioned by what is happening. Replies to the consultation document from Tory local authorities were not just critical, they were angry. Perhaps that is why the Secretary of State has refused to make available the responses to the White Paper. Reasons of national security cannot explain why the normal practice of placing replies to consultative documents in the House of Commons Library has been ignored. We can only deduce that the Government do not want us to know the consensus on the proposals—or is there some other reason that we have missed?

No one would dispute the need for further education colleges to get on with their job without petty interference or unnecessary restrictions on their day-to-day management. However, as the noble Lord, Lord Belstead, has said, under the Government's own proposals for local financial management colleges governing bodies already have considerable autonomy. They could be given somewhat more autonomy by being granted corporate status. We intend to do that after consultation with the colleges and LEAs on how to effect it. But to reorganise the whole system in order to allow colleges to manage their own affairs is a classic case of sledgehammers being used to crack nuts. It will result in serious disruption in the short term and the loss of the capacity to plan this stage of education. Moreover, the centralisation proposed is a complete repudiation of the concept of local democratic accountability for what is, and should be, a local service meeting local needs.

It also means that extensive local knowledge, experience and expertise will be squandered in favour of an unaccountable central bureaucracy with an ill-defined regional structure involving the invention of further bureaucracy. The Secretaries of State for Education and for Wales will increase their powers yet again under the Bill. There are countless examples running through the Bill where that happens. They are also to choose the members of the funding councils and the regional committees, extending patronage at the expense of electing people on a democratic basis.

There is currently no provision for either LEA representation or TEC representation on the funding councils. Surely that is needed. A great deal of time and expense will have to be devoted to establishing, staffing and financing those quangos at national and regional levels to carry out tasks which at present are perfectly adequately undertaken by local government. That is inefficient and uneconomic. The transitional costs are £28 million and the running costs £32 million, quite apart from unspecified extra costs in the colleges.

The proposals also threaten to destroy local coherence, with responsibility for education and training for those over 16 being divided between a number of bodies.

I turn first to the divorce which is being introduced between the sixth forms in schools on the one hand and the sixth form colleges and FE colleges on the other. The inclusion of the sixth form colleges in the new sector is particularly perverse. They are small institutions which are legally schools rather than FE colleges and are seen as such by parents and students. It seems unlikely that they will survive in the new sector, but perhaps that is the Government's intention. However, not only is their future threatened; so also is the future of the sixth forms in schools.

Transferring the duty to provide sufficient full-time education for all 16 to 18 year-olds to the new councils is causing great anxiety in local authorities and in 11-to-18 schools about the future of the sixth forms. Will they receive the funding necessary to maintain them, or is it the Government's intention that they should eventually wither away? If they are to continue, will the Government say how they intend to avoid duplication between sixth forms under the LEAs and FE or sixth form colleges under the councils and how they intend to ensure that the necessary links are forged, both to avoid duplication and to facilitate the sensible transfer of students from one sector to the other?

The second split involves the TECs. There has been increasing co-operation between them and the LEAs with sensible links being forged. Is it not a great pity that that growing co-operation will now become irrelevant? The TECs are bound to feel frustrated at having to start again with a new network of regional councils or with a somewhat remote national council.

Finally, on the subject of links, will the Minister explain why local authority representatives are to be left of governing bodies as well as the funding councils? No reason is given for that change in the law. It looks like petty discrimination. The Minister has already said that they can be co-opted, but surely it would be desirable to have them there by right as representatives of the local community and to provide a link into the LEA school system. Why be so dismissive about people with a useful background and a wish to contribute? May we also have some explanation as to why students are also to be left off both the FE governing bodies and the higher education corporations? The Government claim to be interested in the rights of the consumer and they keep producing citizen's charters of one kind or another. Surely it is completely inconsistent with their philosophy to change the law on student representation.

One of the principles to which LEAs have attached importance is that FE colleges should provide free, full-time education for their students in the same age range as those still at school, although that judgment does not derive from primary legislation. Unfortunately, unless the Government change their mind and amend the Bill to preclude charging for full-time 16 to 18 year-olds in colleges there will be a risk that, when funds are short, some institutions will see charges as a way out of their problems.

We are also somewhat anxious about new provisions in the Bill to allow schools to charge for part-time students over the age of 16 and full-time students over the age of 19. We are sorry that the principle of free education in secondary schools is being abandoned. Many people will be worried by what looks like creeping privatisation.

I am sure that everyone in your Lordships' House will agree that there should be a proper system for monitoring standards in our post-school institutions—a subject on which I shall dwell further when I deal with the higher education parts of the Bill. With respect to further education, the provisions are extremely vague and it is unclear how they will work. The great advantage of FE colleges being under local authority control is that they are on the spot to intervene when there are problems with respect to both quality and standards. It is also noteworthy that HMI has been satisfied with the way that LEAs have carried out their duties in that respect.

There are many other details in the first part of the Bill about which we are unhappy and on which we shall wish to move amendments in Committee. For example, we are anxious about the transfer of capital assets From the LEAs to governing bodies and the fact that any debt relating to those assets will be left with the local authorities, although the asset has been transferred. We are worried about the terms on which staff will be transferred. We are immensely surprised about the omission of any reference to prison education. We are worried about provision for young people with special needs, a subject which my noble friend Lady David will cover in her speech today. We are also worried that the statutory obligation to provide youth services appears to be diminished by the Bill.

There are just two more issues to which I want to refer in a little more detail before moving on to the subject of higher education. The White Paper devoted considerable space to the need to reform the system of qualifications for 16 to 19 year-olds, yet there is nothing in the Bill to provide a statutory framework for a reformed system. The Government tell us that they are committed to the provision of an ordinary and advanced diploma, yet at present that commitment looks like little more than a name tagged on to the incoherent system of post-16 qualifications that currently exists. I find it distressing to keep on repeating myself in this House on our low participation rates in further education and on the low level of qualifications in our population. The noble Lord, Lord Belstead, said that they are improving. They are, but too slowly. In this House earlier this week I was accused by the noble Lord, Lord Cavendish, of being gloomy. I am not gloomy. I am simply reporting the unfortunate facts that our improvement is much slower than that of our competitors. While only 54 per cent. of 16 year-olds and only 37 per cent. of 17 year-olds stay on in full-time education, we should probably be rather gloomy anyway. There is certainly no cause for complacency.

No amount of restructuring of further education with new funding councils and new paraphernalia for delivering the service will deal with our problems of low participation unless we can provide a sensible system of qualifications which, among other things, ends the divide between academic and vocational study. That is what we on this side intend to do when we win the election. In spite of what the noble Lord, Lord Belstead, said, the Bill makes no attempt to develop a statutory framework to achieve that. It is a regrettable omission.

Turning to adult education—a subject dear to the hearts of many of your Lordships on all sides of the House—we had hoped that the public outcry when the White Paper was published would have led to some new thinking in the Bill which would allay people's worries. Unfortunately, there is little sign of it. Adult education as such has no statutory basis and is entirely subsumed within the general definition of further education. However, continuing education for adults has a real existence which the Bill as drafted does not recognise and even threatens to disrupt. The unworkable distinction between leisure courses to be provided by LEAs and vocational and academic courses to be provided by the FE councils remains. There is a widespread fear that, under those arrangements, the cost to the student of so-called leisure courses will inevitably rise, having an especially adverse effect on the elderly for whom they are often an important lifeline.

Although much will depend on the adequacy of the funding available to both LEAs and funding councils, the fragmenting of adult education between two distinct funding and planning bodies seems destined to make it much more difficult to offer a coherent service on the ground. Adult education is an important part of national life, yet it is to undergo restructuring on the tail of proposals for the 16 to 19 age group, not as a result of an assessment of its own needs. I hope that the Government will think again.

I want now to move to Part II of the Bill. There is today a great deal of anxiety about the level of resources being made available to expand higher education. My noble friend Lord Peston will say more about the issues of funding for both further and higher education, but every year higher education is squeezed harder. The latest Autumn Statement provides no grounds for optimism that the Government are willing to support our universities and polytechnics in such a way that quality can be maintained. I make that point because, however welcome the proposal to create a unified system of higher education may be, it will be of little value if we are not prepared to fund that vital part of our education system properly.

Although I welcome the proposals for higher education in general, there are two respects in which the Bill alarms us. The first relates to Clauses 64 and 77 which have been justifiably described as a charter for ministerial interference. The second concerns the proposals for assessing quality. Vice-chancellors and polytechnic directors are taken aback by the new powers which the Bill gives to Ministers because they were not proposed in the White Paper nor have they been flagged up in any ministerial announcement. Quite the contrary. As recently at 31st October the Parliamentary Under-Secretary of State for higher education said on a radio programme: I think it would be quite impractical for politicians and officials in the Department of Education and Science to make judgments as to where money should be allocated within the university education system". He went on to say that he is a strong believer in the arm's length system. I suspect that we all share his sentiments.

Given what he said so recently, it is surprising to see Clause 66 of the Bill granting power to the Secretary of State to intervene in specified institutions. Noble Lords no doubt will remember that when a similar power was proposed in the Education Reform Bill, it was amended during the passage of the Bill in this House when fears were expressed that it could be used for political purposes and could threaten academic freedom. The amendment confined the Secretary of State to making general conditions. It is unclear why that is now being reversed and why the Bill gives the Secretary of State wide powers to intervene in individual institutions. Those powers, it seems to us, go beyond his legitimate concern to safeguard public funds. Why do the Government need such powers if they are to be used only in the last resort when earlier they conceded that they could do without them? I hope that the Minister will be able to answer that question.

The second cause for alarm is the Bill's provision for the assessment of quality. In our view it is inadequate. It is left entirely in the hands of the funding councils, so that there is a real danger that quality will be sacrificed to crude considerations of cost. The Bill does not even mention the quality assurance role of the institutions themselves, which the Secretary of State described as an important feature of the Government's proposals.

Where is the provision for institutions to set up the United Kingdom-wide quality audit unit on which the White Paper expounds so freely. We believe that there should be an independent transbinary higher education standards council to oversee quality. The Bill gives no clear definition of what quality assessment involves. The Government apparently are not concerned with such details. It seems that quality can be relegated to a single brief clause tacked on to the end of the section concerned with funding.

The country is crying out for a high quality, efficient, well resourced system of further and higher education which is responsive to local and national needs and which creates new opportunities for people to continue their education. Regrettably, the Bill fails to do the job that is needed to achieve that—either, as the noble Lord, Lord Belstead, claims, by providing a better deal for students or by improving participation and standards. There are too many important omissions, some fundamentally unnecessary changes motivated by short-term political advantage, an undesirable further increase in the powers of the Secretary of State and a depressing lack of vision about the nation's educational needs for both young people and adults.

4.23 p.m.

Baroness Seear

My Lords, I hope that I always try to make the best of a bad job. Today I should like to start by saying that I can certainly applaud the Government's decision to get rid of the binary divide. There has been widespread feeling around the country—certainly reflected in my own party—for a very long time that the binary divide is outdated and should go. We are therefore very glad that the Government have decided accordingly. Obviously, it will very much facilitate the extension of tertiary education to a much wider range of people who will feel that they are free to choose the courses which are most suitable to their particular interests and needs regardless of the name attached to the institution. That is certainly a clear gain.

Having said that, there are a great many items in this legislation with which we on these Benches cannot possibly agree. I see that there are 38 names on today's list of speakers. I had not proposed in any case to deal today—if I had so proposed, I should have changed my mind in view of the list—with the detail of our criticism of the legislation. We shall do so ad nauseam in amendments as we go through what I fear will be long, stuffy nights trying to improve the Bill.

I propose instead to draw your Lordships' attention to what I believe are the basic fault lines on which this legislation is based. When the foundations are wrong, it is not surprising if the structure is full of defects. The first fault line is not perhaps immediately connected with education but has to do with the Government's inability to understand, which comes out in Act after Act, that a pluralist democracy requires not only a democratically elected government—for once I leave on one side whether that is what in fact we have—but also strong free-standing institutions with a maximum of self-government, able to run their own concern and not interfered with by central government. That is as important as an elected democratic government.

Little by little, either through intention or because they dc not understand what a pluralist democracy is all about, the Government have been whittling down the power, authority and independence of those essential institutions. One of them undoubtedly is the universities. I find it horrifying that this Bill includes the possibility of direct interference in particular institutions—I repeat, in particular institutions. The Government cannot believe that they have the benefit of eternal life. Have they not thought of what might take their place and the kind of intervention that might come from other people either of the extreme Right or the extreme Left?

Be that as it may and leaving aside the nature of the government, it is the very fact that the Government have taken it upon themselves to intervene in what goes on in individual institutions that is so totally unacceptable. It offends the principle of pluralism. It is also indefensible; for how do the Government, the Secretary of State and the civil servants in the DES, who presumably ultimately will be responsible for such interference, know what is best? I know that there are among Ministers, ex-Ministers and civil servants a small number who would have made very good academics. But there are not very many. How many of them are able to intervene effectively to improve the standards of higher education in this country? Yet that is what is planned.

There may be a Secretary of State, who, backed by a civil servant, believes for some reason—there may have been moments when I shared the same view—that sociology is not a good subject. There have been sociologists who positively incited that view. But to go on from that to say, as this Bill would, that it would be possible to tell Institution X that it must stop teaching sociology is intolerable.

The Government believe in the market. If courses are so awful, the number of students will dwindle. Students, parents and schools are not totally blind and unaware of what goes on in colleges. One observes that some departments receive fewer applications than their predecessors or their competitors. That works through and it is a much safer way. A market oriented government should be the first to agree that the customers, as we all have to be called now—the potential students in the schools which prepare them—are the best people to decide what changes ought to take place together with the experts who run the courses.

That is my first basic objection to the failure to understand the importance of maintaining freestanding universities, which have been a triumph in this country. Some have had defects, of course. I should like to quote from my old boss at the LSE, Ralf Dahrendorf. Asked why on earth lie had come to the LSE, because to some of us it seemed a rather strange decision—I see the noble Lord, Lord Peston, looks very disapproving—he replied that it was because he had such admiration for the British university system as it then was. If the Government have their way with the Bill, I very much doubt whether such as he will make that statement in a few years' time.

There is the same failure to understand the importance of free-standing institutions, of spreading power and of allowing other organisations as well as government to make important decisions. The noble Baroness, Lady Blackstone, raised the issue of the constant whittling away of the powers of local authorities. We all supported the movement of the polytechnics away from local authorities because they are national and international institutions. As the noble Baroness, Lady Blackstone, said, colleges are not. The colleges deal with local matters, which is pre-eminently a job that should be handled by locally elected representatives.

Why have the Government got it in so much for local authorities? They have been bemused by the People's Republic of Lambeth. Living there, I sympathise with them. However, the People's Republic of Lambeth is by no means typical of local government in this country. We may have to put up with such places as the People's Republic of Lambeth if we wish to maintain the independence of self-governing elected authorities in the locality dealing with matters of the very greatest importance to people living in the area such as the local colleges. Why take them away and hand them over to another funding body with powers to intervene? That body will be appointed to suit the government of the day, as such councils always are, by whatever government are in power. So much for the failure to understand the importance of leaving those self-governing organisations alone.

The next fault-line to which I wish to draw attention runs through the Bill and also through other educational developments that the Government have spawned. It is their determination to make a sharp distinction between what they call vocational and non-vocational studies. It is a false distinction. That cannot be said too often. What matters is the way that any subject is taught, as any good teacher will confirm. One can teach a traditional academic subject in a totally non-educational way. A so-called vocational subject can be taught in an extremely educational way if the teacher knows how to do so.

What does the distinction mean? As I said in another context earlier this week, what is mathematics? Mathematics is surely in many people's eyes the queen of genuine educational subjects. A great deal of university education throughout the centuries has been based on it. But if one is to be an engineer, it is a highly vocational subject. Does that make it a less respectable subject to be taught because it may be taught with a more applied bias to engineers than to non-engineers? What about English? Is that a vocational or a non-vocational subject? People regard English Literature as a highly academic subject. However, everyone says that the power of communication is a core skill—what a horrible expression for studying the language—that everyone ought to have. It is certainly true that there are few jobs of which one can make much success unless one is able to express oneself reasonably plainly in Queen's English.

Where do we stand therefore? Modern languages are another example. We need more teaching of modern languages than at present for straight vocational reasons. No one will say that the study of modern languages is not also in the traditional sense a highly academic subject. Why must we have this absurd division which governs so much of government thinking?

I refer to the new alternatives to A-levels—they do not appear in the Bill—which will give access to the new institutions which are coming on stream and will develop. What is proposed at present—I referred to it in an Unstarred Question recently—is an alternative which has no academic respectability and which will defeat the objective of the Government in trying to attain a second respectable academic line into higher education.

Such thinking stems from the Government's belief that there is this sharp distinction between vocational and non-vocational studies. That attitude affects their approach to adult education. Throughout the country there is the greatest anxiety about the future of the adult education colleges. I must declare an interest as chairman of Morley College. In some ways that college represents a slightly different issue about which I do not wish to speak today. The Richmond Adult and Community College is deeply anxious about its future. As a result of the outcry, the Government made some modification of the White Paper which referred to what they patronisingly called "leisure activities". Those leisure activities include music, art, philosophy, history and classical studies. They are studied in adult education colleges. Those are to be regarded as leisure activities not supported by the Polytechnics and Colleges Funding Council but to be financed by fees.

As a result of the outcry the Government have said that local authorities may fund such courses. But "may" is not "must". They give them the power but no requirement to do so. That has always been a problem regarding funding of adult education. With local authorities so strapped for cash as they are at present—and there is no indication that the Government will provide extra funds in order that they can take on those extra responsibilities—what chance is there that the adult education colleges will obtain the money that they need? Who will suffer? The answer is that a great many people will. Again we have the false divide between the vocational and the non-vocational.

Noble Lords may be surprised at the vocational consequences for many individuals who have taken courses which appear to be totally non-vocational. I can give examples of people who have come to Morley College. They take an art class. They have never had a job previously. They have no confidence in themselves and they thought that they were no good. But they found that they were good at something and that gave them the confidence to go out and get a job. Even flower arranging at adult colleges—people jeer at it; it is in no way typical of what goes on at the present time—can be vocational. One can set up a florist's shop and do it very well.

One after another of the so-called leisure activities can have vocational application or achieve vocational developments. It is surprising to find what subjects prove to be a good base for unexpected careers. Recently I was told that computer people were particularly good if they had studied modern languages. I do not know why; but that was a serious finding. I do not believe that anyone ever anticipated that that would be so. I also understand that many businesses have found philosophy graduates exceptionally good for training for management positions. That shows what nonsense it is to make those clear-cut divisions. We cannot make government understand that it is a false distinction and bedevils what they seek to do.

Another fault-line is the Government's failure to understand that education is an investment. My party is the only party which has said that it would be prepared to put up taxation in order to pay for decent education because a good education cannot be achieved on the cheap. Running through the Bill are signs that the Treasury's sticky fingers have been on it. It is preventing developments and the level of generosity necessary to provide the standard of education that will help to develop a truly civilised society. After all, education is about building a truly civilised society, which includes people with the competence to earn their living and to be successful in the economy. That is important but it is not, never has been and never should be the primary purpose of education.

4.40 p.m.

The Lord Bishop of Guildford

My Lords, earlier this week I commented on the Local Government Bill. I spoke with what I hoped was a cool enthusiasm. I respond to this Bill with what I can describe only as enthusiastic coolness. Its undoubted achievement is that it recognises polytechnics as full partners in the higher education system. However, I must express four areas of anxiety which relate in some measure to the speeches already made.

I said earlier this week—and the point was powerfully developed by the noble Lord, Lord Beloff—that to remove further education and sixth-form colleges from local education supervision and pass them over to appointed regional councils was an erosion of local democracy. It makes the institutions less accountable locally. There may be short-term financial gain for the further education colleges but to separate responsibility for sixth-form colleges from school sixth forms fragments the provision of education for 16 to 18 year-olds just at the time when we need to draw it together and enhance it. The White Paper sought to enhance vocational training and to integrate it with the academic. My fear is that the proposals risk splitting them wide apart, which would be educationally damaging.

A more particular point relates to religious education. One effect of taking sixth-form colleges out of the schools regulations is to remove the requirement for those students to participate in religious education and worship. I ask the Minister whether that is the intention. Clarification will also be necessary in respect of aided and controlled sixth-form colleges so that there is no conflict between the new arrangements and their trustees. Surely we need a developed pattern of education for 16 to 18 year-olds with a width of choice to suit varied abilities. The educational provision should be under unified supervision and locally accountable. I suggest that at this point the Bill moves in the wrong direction.

There is an equal risk of fragmentation as regards adult education. The emphasis on certificated adult education to be provided through the further education funding councils is in its way admirable. We need people of all ages to discover their capacity to learn and to become qualified. However, for many people that is a stony path and they tiptoe along it, particularly in the early stages. They often start unconvinced that they can ever qualify. Yet the experience of learning gives them a confidence and a courage to move on. To separate certificated adult education from so-called leisure adult education is to create a division which is often not in the mind of the mature student and runs the risk of limiting access to certificated adult education at just the time when we want to open up access to all in education.

Our experience is that some of the people who embark cautiously on adult education are looking for a new direction in life or wanting to turn a corner. There are, for example, ex-prisoners; people who have a handicapped person in the family for whom they must care; older people wishing to find a new purpose for their declining years; and people who have suffered a disorientating loss. Such people need to be given encouragement to start on adult education without later hiving to jump an entirely artificial barrier which has been created needlessly by legislation.

The Government have determined on league tables for schools so that parents can assess performance. Similarly, the Government are providing for league tables showing the performance of local government. Should not we also have league tables showing the effective and efficient provision of adult education in any given locality?

The churches are proud of the pioneering work done by many devoted Christians in the early days of the British adult education movement. One thinks of people such as Archbishop William Temple. Our concern in that field continues.

I turn to higher education. I wish at once to welcome the provisions in Clause 62 of the Bill to which the Minister referred. The White Paper made no specific reference to the part played by the church colleges in higher education. Therefore, it is gratifying to find that the Government have included in the clause reference to the denominational colleges. The funding council is to have regard to what appears to it to be an appropriate balance in the support between institutions which are of a denominational character and other institutions. That is most welcome.

Equally, we were much reassured by the Under-Secretary of State responsible for higher education, Mr. Howarth, when a few months ago he said to the Standing Conference of Principals: A key factor underlying the remarkable growth in higher education in the past decade has been the diversity of the provision on offer; the variety of institutions providing courses and differing missions serving different needs". He went on to give the assurance that the new funding arrangements, will need to relate to, and safeguard, the best of the distinctive missions of institutions". If there is to be that choice and diversity of institutions it must be backed up by ensuring that the colleges, including church colleges, should be, and should he seen to be, full partners in the higher educational provision with the opportunity to develop, adapt and take initiatives in their own right.

Unfortunately, the criteria proposed in the Department of Education and Science circular referred to by the Minister makes the requirement that colleges should reach 4,000 students before they can qualify for certain benefits. That virtually precludes the development followed by many of our present universities and polytechnics which began with student numbers well below 2,000. Some of our universities, including Southampton, Exeter, Leicester and Nottingham, began as colleges. They were established as university colleges with only a few hundred students and developed into universities with student numbers below 2,000.

Most colleges of higher education have student numbers rising towards 2,000. Surely, in a time of rapid expansion, when the Government are rightly seeking flexibility, diversity and choice, we need comparable opportunities for growth. The requirement of 4,000 students destroys conventions that have served us well in the past and closes the door to the vital process of institutional development just when we need to encourage it. There is a danger of re-opening the binary divide in which the colleges will be seen as second-grade institutions dependent on universities in their development and vulnerable to them in times of financial constraint.

Quality in higher education is more significant than size. Some of the church colleges have pioneered work in coupling vocational training with academic rigour. Their contribution to widening higher education needs to be recognised. For instance, four colleges have founded the Urban Learning Foundation in East London which provides teachers in training with direct experience of the inner city and its communities. That is the sort of imaginative venture which smaller colleges are often better equipped to undertake than larger ones.

The Government have indicated that they wish to sustain and improve quality and to secure choice. The church colleges of higher education and similar colleges have a vital part to play in achieving those goals. The colleges have proved their adaptability and their speed of response, already identifying and meeting new and important targets; for example, nurse education and the inner cities. They are vital to the process of widening the range and form of higher educational training. However, to play that role they must be given a realistic opportunity to take initiatives, to develop in their own way, and to gain degree granting powers and access to the title of university or university college. Otherwise, the admirable initiatives of Clause 62 may not be possible to fulfil.

Finally, I comment on the abolition of the CNAA and express anxiety in two respects, although I recognise that many noble Lords can speak with much greater authority on this aspect of the Bill. First, I hope that we shall have some assurance that the students who have embarked on CNAA degrees will be allowed to complete their courses. In particular, there is anxiety about the 500 or so CNAA research students.

Secondly, there is a more general anxiety that by abolishing the CNAA we shall lose a pioneering development which has added a new dimension to academic work. The students, particularly research students, are often mid-career people studying part-time, some living and working abroad. Their experience enriches the research process and their jobs often pay for the costs. The flexibility of using qualified supervisors from within and beyond the academic world in this country and abroad creates an important bridge between the academic world and the world of business, industry and social care.

It is not clear that the existing university departments, or even the new ones, will be able to provide enough internal supervisors to validate degrees of that sort of unusual student. It would be reassuring to hear from the Minister that thought is being given to that aspect of education and that there is in mind provision to ensure its continuity. I look forward to hearing from the Minister on that aspect.

As I said, there are some welcome improvements in the Bill but I hope that the anxieties which I and the two previous speakers have expressed will be taken extremely seriously by the Government.

4.52 p.m.

Baroness Perry of Southwark

My Lords, I am very pleased indeed to speak on a Bill which represents such a major step forward for the provision of education in this country. In my short time as a Member of this House, I have found it a great privilege to hear the scholarly and expert tone of the debates, and, therefore, feel all the more diffident at making a contribution myself. Only my deep convictions on the matter with which the Bill is concerned, and my experience of your Lordships' generosity, give me the courage to speak.

As the Minister indicated, the Bill is designed to increase participation in post-compulsory education. It also strengthens and enhances the status of technical and vocational education within both the further and higher education phase. The needs of the national economy can only be met if the objectives of the Bill are accepted and attained.

Although I wish to address myself to the second part of the Bill dealing with the higher education aspects, I should like to reassure your Lordships that the experience of the polytechnics in being released from local authority control by the Education Reform Act 1988 can only give confidence and hope for the future of the further education colleges when they are similarly made independent. There is an organic dynamic within institutions which enables and encourages them to service the needs of their community and the nation far better than any external planning can hope to do.

As regards the higher education aspects of the Bill, I must declare a personal interest. As the head of one of the English polytechnics, South Bank here in London, I have a strong motive for warmly welcoming the proposals for higher education in the Bill. Together with my colleagues in other polytechnics, I look forward to the time when the 15,000 students in my institution together with nearly 2,000 staff, will be studying and working in a university. My marketing department looks forward to recruiting at home and overseas with the title of university, and my industry liaison unit will be pleased to offer to our many industrial partners the status of collaboration with a university instead of a polytechnic.

I thank the noble Baroness, Lady Blackstone, for her kind words about the polytechnics. Other speakers have been similarly kind. Nevertheless, some Members of the House may still have some reservations and, indeed, anxieties at the proposal to grant to polytechnics their own degree-awarding powers, together with the right to the university title. That is understandable, if the phenomenal growth and achievements of the polytechnics over the past 22 years are not yet well known to all noble Lords.

From their beginnings in 1969, the polytechnics have grown from eight in number, providing education for around 40,000 students, to their present number of 34 providing higher education for well over 350,000 students. Since the Education Reform Act 1988 made polytechnics and some higher education colleges in England into corporate bodies (the polytechnics in London, including my own, were already companies limited by guarantee) they have demonstrated not only their educational value, but also their ability to run their own affairs as large and well managed businesses.

The special contribution of the polytechnics to the national range of higher education offerings has been in the highly vocational nature of their courses, providing professional and technological degrees ranging from the traditional fields of law, architecture and engineering, to the more recent developments; for example, electronic control systems, intelligent management systems, or European business management. Their close links with industry and commerce are preserved in a variety of ways. In pursuit of the education and training of highly qualified professionals, the polytechnics provide a wide range of sandwich degrees, giving substantial work experience in this country or abroad to students during their under-graduate experience. People from industry and business are brought in to help in the planning, validation and review of courses. Research activity in the polytechnics is predominantly applied, largely sponsored directly by industry and commerce, as are many of our doctoral students who are released by their employers to conduct research of value to the company. At South Bank, for example, we have almost £15 million worth of external contracts for research and consultancy from industrial sponsors.

It is the polytechnics, too, which have offered higher education opportunities to a much greater range of students than was traditional in the universities. Eighty per cent. of all mature students in the UK study at polytechnics, many of them on a part-time basis. Perhaps because of that pattern, the polytechnics have been successful in attracting and keeping highly intelligent students from social classes three, four and five and from the ethnic minority population —an important task.

No country can afford to regard higher education of this nature as second class. And yet by the continuation of the binary line, separating universities from polytechnics, we are explicitly saying to our customers at home and our competitors abroad that the young people who choose to graduate through a polytechnic are somehow inferior to those who study on more traditional degrees in universities. Not only is that an unjustifiable handicap for the graduates themselves but, more important, it is a serious hindrance to the development and success of the United Kingdom economy. Our graduates include those who have the training and skill most needed to take the economy forward; and they need every scrap of advantage in establishing a competitive position with their counterparts in Europe and other advanced countries.

The Other great advanced economies of Japan, the United States, Scandinavia and Western Europe offer university education to a third or more of their population. In contrast, only 10 per cent. are so privileged in this country. Those countries have long understood that the definition of a university is wider than a place of pure academic study, but must embrace also the education and training of the highly skilled and qualified workforce which any country needs if it is to survive. The Bill proposes a similar widening of the definition of a university, to include all that the polytechnics do and have done.

Nothing can detract from the excellence of our great universities with their long and proud historic traditions. As in every other European country, the great names will continue to command the international respect which is rightly their due. They will attract the academically able in their staff and their students and will continue to conduct pure research of world class standing. But they alone could never t e sufficient to fuel the needs of a modern industrial economy.

In a totally different and diverse way, the polytechnic tradition of vocational degrees and applied research has its own form of excellence. It has served UK plc well in the past and will continue to do so in the future. The Bill will allow it to do so without the handicap of second-class status. The Government's proper recognition of the importance of this form of higher education is one which the country must embrace if our economy is to remain competitive and, indeed, if our national standards are to survive.

5.1 p.m.

Lord Monkswell

My Lords, I was a little nervous when I saw the list of speakers this afternoon. It is not since 1985, when I made my maiden speech, that I have spoken so high in the list, and it is the first occasion on which I have had to follow a maiden speaker. I must admit that it is a great pleasure and a pleasant duty to follow the noble Baroness, Lady Perry, because of her very nice contribution this afternoon. She brings to the House an impressive record of achievement and experience, particularly in the field of education. I am sure that I speak for the whole House when I say that we all look forward to hearing her contributions in the future.

I had personal pleasure in listening to her contribution this afternoon, because she expanded so well on the triumphs of the Labour Government of 1964 to 1970 with their introduction of the polytechnics into the higher education field. That gave me personal pleasure because I was a product of one of those polytechnics. I shall elaborate a little on that later.

This Bill is yet another government Bill that erodes democracy, centralises decision making, disturbs established institutions, will lead in some cases to underfunding, and also increases fragmentation. The one little ray of sunshine contained within the Bill is, put baldly, the university status for polytechnics, which I am sure we all welcome. Unfortunately, although I suppose one could say that that ray of sunshine comes from a bright blue sky, there are some dark clouds there as well.

As a member of a local education authority your Lordships will appreciate that I follow my Front Bench speaker, my noble friend Lady Blackstone, in opposing as strongly as I can the further education elements of this Bill. It is an act of vandalism in educational terms. It has already created a number of problems, and will make them worse. The fairly separate nature of the polytechnics from the other activities of local education authorities has already been alluded to, but in this case we are talking about education provision that is keyed in, tied in, to the education provided in schools. One of the problems is the fragmentation of what should be a close relationship between schools and further education.

There are obviously some specific problems and questions to which the LEAs will want answers. The first, of course, is on the basis that LEAs, by virtue of their involvement with schools, will have to have a relationship, an involvement, with the further education sector. It is not clear as to how we are going to be involved. We desperately need some clarification from the Government.

The second point relates to the transition arrangements. A sum of money has been mentioned as being earmarked for the transition of the colleges, but because of the integrated and involved relationship with the LEAs in this field there will be transition costs for the local education authorities. My hope is that the Government will consult the LEAs and consider providing some help to them for their transitional arrangements.

There is a lack of clarity about the future financial arrangements. Again, there is a need for the Government to consult widely, particularly with the LEAs and obviously the colleges, and to publish the financial arrangements for both as early as possible. Other speakers have spoken about the conflicts between further and adult education and between vocational and recreational education or work or leisure. I do not want to elaborate on those. I am sure that many other speakers tonight will speak on those subjects.

I should like to spend a few moments on the higher education side. As I said, I think we can all welcome the elevation—I am not sure that that is the right word—or the assimilation of the polytechnic sector into the university sector. We can see that that is the product of developments over a period of time where the institutions have had the chance to prove themselves and to take their place alongside the universities. But one of the difficulties we are faced with in this Bill is that we are not just talking about enabling virtually free-standing institutions to assume a change of name and status, which they virtually have already. We are talking about empowering the Secretary of State, a government Minister, to be able to say, "Yes, that organisation can confer a degree; this institution can be called a university", and, under Clause 77, to require higher education councils to comply with his directions. These are centralising powers. They are powers that we would hesitate to give to an institution comprised of learned academics. It is quite another thing to give those powers to the Secretary of State.

One last word about the Council for National Academic Awards. I have to declare an interest in that I have a CNAA degree, and I am proud of that. I think that I received as good an education—and in some cases I would argue a better education—to degree standard, undergraduate level, from Portsmouth Polytechnic under the Council of National Academic Awards than perhaps some of my peer groups in established universities. I am not sure that effectively abolishing the CNAA is going to be a progressive step.

This Bill has drawn a long list of speakers. I could speak for literally hours on the subject. Your Lordships will be glad to hear that I am not going to. I am tempted to, but I shall not. I have probably spoken enough already, bearing in mind the long list of illustrious speakers who, I am sure, will support and echo some of the queries that I have raised and also raise others that I do not have time to deal with this afternoon.

5.10 p.m.

Lord Kirkwood

My Lords, I too would like to congratulate the noble Baroness, Lady Perry of Southwark, on an excellent and well informed maiden speech. I look forward to many contributions from her in the future. The noble Baroness, Lady Blackstone, and my noble friend Lady Seear have expressed—and I am sure many Members of your Lordships' House who have yet to speak will express—their anxieties about the powers that the Bill gives to the Secretary of State to interfere in the business of universities, not only in funding in a general way, where it might be argued that he has a responsibility to Parliament, but apparently also in academic matters and in specific institutions, which offends the principle of university autonomy. I shall add my voice to those of other noble Lords without repeating their arguments.

The need for quality assurance in universities is not disputed. The CVCP has already established an academic audit unit for that purpose. No doubt some similar body will take its place answerable to the newly enlarged CVCP. That body will ensure that the mechanisms exist within higher education institutes for the quality control of courses and teaching. What is the function of a quality assurance committee reporting to the funding council and not directly to the universities? The Government must make clear exactly what its duties are and the boundaries within which it should operate.

In Schedule 3 to the Bill a table is given for the calculation of enrolment numbers at an institution taking into account various part-time students by the use of a multiplier. It will be interesting to know how those multipliers were obtained and whether their use is to be restricted to determining whether an institution joins the higher education sector or whether the table is intended to be employed for other uses as well.

Finally, there is the question of the titles to be adopted by the new universities. The Bill states that in granting consent the Privy Council will pay regard to the need for avoiding names which may be confusing. There is genuine concern felt by the existing universities about the confusion that might be caused not only in the UK but more particularly by applicants and employers overseas who are not familiar with our higher education system. It would be prudent to give greater direction to the Privy Council as to what will cause confusion. We must not have an Oxford City University as well as an Oxford University, wherever it is.

5.13 p.m.

Lord Dainton

My Lords, I congratulate the noble Baroness, Lady Perry, on her maiden speech. It is a great pleasure to me, since I was one of the founder trustees of one of the polytechnics, to hear someone who knows as much about the polytechnics as should be known.

I shall confine myself to Part II of the Bill. I remind noble Lords that about three and a half years ago the Second Reading of the Education Reform Bill took place in your Lordships' House. In that debate I began by welcoming the principle, which was given substance in that Bill, that polytechnics should become higher education corporations. In this, the Second Reading of the Further and Higher Education Bill, I should like to be equally welcoming to what I have always seen as the next logical step in the evolution of Government funding mechanisms for higher education institutions of all kinds.

Indeed, I recall that as long ago as the mid-1970s I submitted a personal letter to the chairman of the Oakes Committee, which was considering these things at that time, arguing that the binary line should be abolished. I also welcome the news of the appointment of Sir Ron Dearing as chairman of the council for England. I wish him well in what I am sure is going to be a difficult and very interesting task.

That said, I am now somewhat dismayed to see the responsibility for funding partitioned into separate councils for England, Scotland and Wales. I say that because my experience of higher education, and, I believe. also that of many others who have been similarly involved, is that the rate of spread of successful innovations throughout higher education depends in some considerable measure on competition for resources. In the past English universities have benefited from emulating and adapting successful new developments in Scottish universities and vice versa. In both cases that happened the more rapidly because all were competing for the esteem—and perhaps more importantly, the money that went with it—of the same funding body. That incentive will now be lost.

To some degree that adverse effect will be mitigated because, by including the polytechnics in common funding systems with the universities, each system in England, Scotland and Wales will be larger than it otherwise would have been. That brings me to my second point; namely, that each council should aim to encourage diversity of institutions and their missions rather than uniformity. The history of UK higher education contains far too many instances of the deleterious effects of academic social pressure—or snobbery, call it what you will—which caused newer institutions to strive for what is sometimes called upward mobility (in my view wholly misconceived) and to do so by aping the methods of the older and more established institutions. It is essential that the primary vocational role of the polytechnics be properly sustained and nurtured. If it is not, the losers will be initially the school-leavers and later the country itself. I also hope that when the new funding councils are established the Secretary of State will make that point clear to all their members.

I further hope that the retention of this important special objective will be seen as a matter of distinctive pride by the members of the polytechnics themselves so that, even though the word "university" may become an accessible appellation (as the Bill states) they will not be seduced into abandoning words in their title which express this special mission. As a former professor at the Massachusetts Institute of Technology I would encourage them to retain in their titles such terms as "polytechnic", "institute of technology" or "technological institute". I recognise that at the end of the day it will be for the Privy Council to decide whether it can give its consent to a proposed change of name. But I hope that it will bear these considerations in mind.

I would now like to turn seriatim to some of the principles that seem to lie behind some of the clauses of the Bill which give me great cause for concern. The first relates to the competence of the councils to discharge their duties. Clause 58(4) instructs the Secretary of State, when he is appointing members of a council, to have regard to the desirability of including, persons who appear to him to have experience of, and have shown capacity in, the provision of higher education or to have held, and to have shown capacity in, any position carrying responsibility for the provision of higher education". That is in very marked contrast to the corresponding Section 131(3) (b) in the Education Reform Act 1988 where it is stated that no fewer than six and no more than nine of the 15 members of the UFC should be, currently engaged in the provision of higher education". For reasons too obviously relevant to the competence of the funding councils, I regard that phrase in the existing Act as absolutely essential. I hope that the Government will be prepared to retain the phrase and ensure that the experience of those who have living communion with the work of the universities and the polytechnics today rather than those who have had the experience will not be neglected.

From the inception 102 years ago of government aid to universities and university colleges in England, successive governments have for very good reasons which have stood the test of time accepted the arm's length principle—that is to say, they have appointed a committee to allocate resources to individual institutions from funds allotted to it by government. Your Lordships will remember—and we have already been reminded of it—that in the first draft of the Education Reform Bill this principle was abandoned and the Bill contained a clause giving the Secretary of State power to intervene in the process as it affected any individual institution. In the event wiser counsels prevailed and the Act was splendidly explicit. Section 134(7) states categorically: The conditions subject to which grants are made by the Secretary of State to either of the Funding Councils shall not relate to the making of grants or other payments by the Council to any specified institution". It is a clear negative. In marked contrast, Clause 64 of the Bill now before us gives the Secretary of State power to impose requirements to be complied with in respect of each institution. That is a clear breach of the arm's length principle.

Lest there be any doubt of the desire of the Secretary of State to have absolute power over the councils to direct them to do precisely as he wishes, the point is made again in Clause 77, the final clause of Part II of the Bill. It is interesting to see that it does not appear in the Bill relating to Scotland. I am puzzled over that. Evidently the Government think that such intervention in university, polytechnic or central institution affairs in Scotland is not called for. Why not, I wonder. Is it that the ghost of Adam Smith is having some influence on Scotland as he has had on the party in government? What has caused this volte-face so far as concerns England? What evidence is there that such power in the hands of the Secretary of State is necessary? I can see no possible justification for this retrogressive move. I urge the Secretary of State to abandon it and to restore the phrase in the Act which I have quoted.

In moving now to Clause 65, it is good to see that the councils can proffer to the Secretary of State, information or advice…as they think fit". But then a restriction is placed on this power by insisting that it is in, such manner as the Secretary of State may from time to time determine". Why fetter the councils in this way? Surely the manner must be that best adapted to the purpose, and in any case the Secretary of State will not know what any proffered advice is about until he receives it, so he will be in no position to predetermine the manner of its presentation. A simple rewording here would gain what we all want, which is the free flow of information and advice between the Secretary of State and the funding councils.

I turn now to quality, to which the noble Lord, Lord Belstead, rightly attached importance. A duty is placed on a council to assess the quality of education provided by any institution it funds. We can all applaud that intention. However, the clause also prescribes the means; namely, a quality assessment committee. This is a vitally important task which cannot possibly be carried out in that way. What is needed is not one but many committees, each one covering a cluster of related subjects; for example, physical sciences, a subject with which I am familiar. The members of such sub-committees, being acknowledged experts, will know from visits to all the higher education institutions where these subjects are offered the quality of those offerings. They are qualified to put into their proper and secondary place those pseudo-objective but flawed arithmetical criteria of quality, like citation indices, recently so fashionable.

In addition, the Secretary of State would under Clause 78 be given power to direct "two or more councils" to appoint someone to assess the arrangements which all institutions in the whole of Great Britain make to maintain academic standards. That is the clearest possible intrusion into academic affairs. There should be no need for this if the quality assessment work is done in the thorough and proper manner I have suggested. In any case we have, although it seems to have been forgotten, the external examiner system which ensures that any inadequacy of standards is quickly brought to light. It would do so far more rapidly than any monstrous single committee which had no stated competence.

The final clause to which I wish to refer is Clause 79. It empowers a council to appoint a person to inquire into the actual running of any institution. Clearly it is reasonable for a council to have the means of satisfying itself that an institution is using the council's grant to produce the desired outcome with the minimum of waste, but it must he equally true and clear that the council's jurisdiction must not trespass on areas of activity funded from sources other than its own.

While there is much in the Bill and its underlying purpose which is acceptable, there yet remain many substantial points, on only a few of which I have had time to touch, which in my view require modification if the right balance is to be struck between accountability for the use of public money and institutional autonomy, so that the higher education systems in England, Scotland and Wales are efficient, flexible and of the high quality that we all desire.

5.26 p.m.

Baroness Young

My Lords, I begin by congratulating my noble friend Lady Perry on an excellent maiden speech. It was a great pleasure to listen to her speaking so clearly and with such authority on her own subject. I am sure that we are all delighted that she is taking part in the Second Reading debate of this Bill. We look forward to her later contributions on it.

I also thank my noble friend Lord Belstead for introducing the Bill and, unlike almost every other speaker so far, I shall start by giving it a warm welcome. It puts into legislative form the Government's commitment to the expansion of access to and participation in further and higher education and implements the policies set out in the two White Papers published earlier this year.

There is a general consensus that far more needs to be done to get an increased proportion of 16 to 19 year-olds into education and training. It is much to the credit of the Government that this ratio has improved. I was pleased with the figures given by my noble friend. However, we still lag behind a number of our competitors; in particular, Germany and Japan. In a highly competitive world, that must be put right not only for the sake of the country but equally for the young people who will be left without training and qualifications and will be, in effect, unemployable.

I therefore welcome the proposals for further education. The proposal to take responsibility for further education away from local education authorities—a point on which I was interested to hear the views of my noble friend Lady Perry—provides an opportunity to follow up the successful experience of the polytechnics. I believe that we shall see increased participation rates and the independence of institutions will allow them to manage their own resources more effectively. Free standing colleges will be able to develop their own programmes and courses, develop links with industry and take full advantage of the new vocational qualifications. I am very pleased that the proposal has the support of the colleges and of the National Association of Head Teachers.

Many criticisms of this proposal have been aired this afternoon. Perhaps I may point out that every education reform brought forward by the Government in the past few years was initially greatly criticised, even though many are now accepted. I have in mind the introduction of the national curriculum, testing and assessment. Even opting out is proving to be extremely popular and very successful. I have no doubt that we shall see much more of it. Underlying the proposal to remove colleges of further education and sixth form colleges from local education authority control has not been a wish to attack the local authorities but a real concern about standards of education, particularly for the average and less average child, which have proved to be considerably lower than those of our competitors, and a determination to raise those standards while at the same time increasing participation.

Having said that, it would be very helpful if my noble friend could say more in his concluding speech about how the funding councils will work. After all, there are enormous differences between the institutions. Colleges of further education have up to 5,000 or 10,000 students but sixth form colleges are much smaller, with the biggest having not much more than 1,500; indeed, some are very small with only 400 to 600 students. It is important that those varying institutions should be fully prepared for their new work. At the same time, and as part of all these changes, I understand that schools will be able to take part-time and mature students into their sixth forms. That is certainly in keeping with the needs of the times. I hope that offering such a wide variety of opportunities really will increase participation rates.

I believe that all speakers have agreed on the ending of the binary line. The polytechnics have been a great success story and enrolments have increased by 50 per cent. since 1979. They have flourished particularly since they have been free from local education authorities. I am glad to see that they will now be able to award their own degrees.

In his opening speech, my noble friend gave encouraging figures about the numbers of students going into higher education. I believe that in 1979 one in eight went into higher education and that by 1991 that figure had risen to one in five. The number of graduates we produce each year is about the same as that for Germany and France. The fact is that nearly everyone who enters a university in this country obtains a degree because of the high entry requirements, unlike other countries.

What is particularly pleasing to me is that much of the increase in the number of students is in fact an increase in the number of women going to university. There is also a welcome increase of 55 per cent. in the number of mature students. The Government's objective to double the number of students in higher education in the next 25 years and to increase access, especially for those groups which are currently under-represented, seems to be one which must be in the interests of the whole country, let alone all the individuals concerned.

Much has been said—and, I have no doubt, will be said—about higher education. I shall leave that to those who are experts in the field. I hope that my noble friend understands that there is great concern both in the university world and in the polytechnics over Clause 64(2) and Clause 77. As the noble Lord, Lord Dainton, clearly explained, in Clause 64(2) a new specific power has been added to those given to the Secretary of State under the Education Reform Act. After the very extensive debates on the subject during the passage of that Act, I am puzzled that the Government should want to alter it. I listened with great care to what my noble friend said, but I very much hope that he will consider bringing forward an amendment in that respect at a later stage of the Bill. I have no doubt that others will put down an amendment, but it would be better if it came from the Government.

There are many other points, but I believe that most of them can be dealt with in Committee. With so many speakers on today's list I do not want to take up too much of the time of the House. However, I have two brief points to make. First, there is concern about the powers of the Privy Council to consent to the use of the word "university"—not that anyone is objecting to the use of the word, but because it could cause confusion. I believe it is only right that we should know a little more about how the Government see this working out in practice. It is especially important that we should be clear on what we are talking about, from the point of view of the application of a potential student from home and, almost more important, that of an overseas student. I share the universities' concern, expressed by the noble Lord, Lord Dainton, about the representation on the funding council and the roles that academics can play.

I greatly welcome the Bill. I believe that it is extremely important for the future of this country that we should increase access to and participation in further and higher education. Of course, at the end of the day what really matters is what is taught. I hope that we shall not get into a long and rather fruitless debate about vocational and non-vocational education. It always seems to me important, in both aspects, that what is offered is very good and that nothing is offered which is not valuable to the student in afterlife and, of itself, a standard of excellence.

Finally, the noble Baroness, Lady Seear—who I see is not now in her place—very much criticised the Government on the question of funding. The increased resources that have gone into education over the past 12 years show that the Government are prepared to back changes with money. As a result, I very much hope that those areas of our national life which have been subject to great criticism will now be put right, that we shall see greater participation, especially of 16 to 19 year-olds, and a great increase in the number of students in higher education. That would be for the good of the country and the individuals concerned.

5.37 p.m.

Baroness David

My Lords, I shall confine my remarks to Part I of the Bill and speak of adult and further education. I am very glad that the outcry and indignation which greeted the provisions for adult education in the White Paper and which were aired in a debate in this House in July caused the Secretary of State to think again and give some reassurance in September that the LEAs would retain their statutory duty to provide leisure and recreational classes. That appears in Clause 11 of the Bill and is in substitution for Section 41 of the 1944 Act. When he replies, can the Minister state categorically that this imposes a statutory duty on LEAs to provide adult education'? We are worried as to whether the Bill will safeguard adult education, which will depend very much on the funding provided for it by the Government. We want to see adult education given a firm statutory basis.

There remains the artificial distinction between leisure and vocational classes. I do not apologise to the noble Baroness, Lady Young, for mentioning this aspect. It shows such a total failure to understand the ethos of adult education and how it works—how one so-called leisure class may lead ultimately to a vocational course, a qualification and a job. There must be the chance for progression. In July, I quoted one case from Spring Grove Adult Education College in Hounslow. Michael was made redundant. He joined a life drawing class and he went on to take A-level art, gained a grade A and has now been trained as a teacher. Thousands more have followed that pattern. It is quite impossible to make the clear-cut divide. If the first so-called leisure classes were not available locally at a reasonable cost or free, this progression—often in the same building; and that is important—would not happen.

The other point I should like to make is that people starting up again, or who start from scratch if they have missed out on earlier opportunities, need confidence. Small beginnings can create the confidence to go on to bigger things. We have to get rid of this artificial and unreliable distinction in the Bill. Can the Minister give us a definition of a leisure class? We do not have one and we need it.

The White Paper opened with the statement that it, contains the Government's plans to improve and develop the education and training system for 16 to 19 year olds". That is admirable. But Ministers seemed unaware of the fact that about half the business of an FE college is with adults outside that age range. In addition, courses for adults are provided by adult education colleges, community schools and colleges and voluntary bodies. It is local provision.

The Bill seeks to define the respective responsibility for adult education of the new funding council and the LEAs. To do that, it has created new categorisations which seem bound to make difficulties in practice, as I have explained. Those categorisations leave significant grey areas, since it will often be the motivation of the student rather than the design of the course that is significant. A language class may include some students with an exam objective (whether or not for vocational reasons) and some merely studying for private purposes. In what category would that class be put?

It is important that there should be effective strategic planning across the whole of further education. We believe that a fundamental reason for the transfer of FE colleges from local government was the Government's need to resolve their difficulties over the poll tax. It has nothing to do with the aims set out in Volume 1 of the White Paper which contains proposals for unifying academic and vocational training. LEAs do a good job with their FE colleges. There is great flexibility. People who have failed in the school system succeed in a different environment. There are close connections with local business and industry.

The Bill proposes the removal of post-16 institutions from LEA control, without residual representation on governing bodies. That will squander a vast accumulation of local knowledge and expertise and will remove democratic accountability and effective overall strategic planning from a key service to local people.

The Bill will split the new FE sector away from school sixth forms and damage the coherent provision of 16 to 19 education. The inclusion of sixth form colleges in the new post-16 sector is perverse as those institutions are legally (and in the eyes of parents) schools rather than FE colleges. Their small size and historically more generous funding is likely to lead to the dilution or total loss of that distinctive form of provision. What possible good can that change in structure do in improving educational provision?

There is then the time factor. All this is to be in place by April 1993. How can it be done? It is a date midway through the academic year. Plans would have to be ready six months earlier—September 1992—only six months after the passing of the Act. What will happen to the governing bodies? At the sixth form college where I am a governor, all that would remain of the old governing body would be two people who had filled casual vacancies. Who will support the principal during the sixth months between September and April? The whole question of funding will he immensely complicated. No wonder the Association of Principals of Sixth Form Colleges is against the change. Sixth form colleges are different from FE colleges. They have a more integrated set of courses. It is a different institutional framework. I hope that we will persuade the Committee to reverse that mad plan.

Planned provision to meet local needs in the light of relevant factors—industrial development, population change and so on—will be replaced by direction from a remote national council; and if the regional councils are set up, why should they be more effective than the LEA, with its wealth and background of knowledge? The cost of setting up those new bodies is most unlikely to be contained within the estimated £30 million per annum given in the explanation of the Bill's financial effects.

Another point relates to the burden of responsibility to be put on the governing bodies. Experience of LMS suggests that it will he too great in some cases, especially with no experienced LEA members and no LEA support. Spectacular failures will inevitably be more likely. At what cost to the students?

I turn now to the rather different matter of residential colleges, currently grant-aided. Coleg Harlech, through the Welsh Office, Ruskin and four others, through the DES, will receive financial support on the basis of student numbers. In that market model, growth will be demand led, and successful colleges which attract more students will receive more financial support. But, despite being in that system, the residential colleges will not be able to increase their student numbers, nor have courses of longer than one year. In those circumstances, and without safeguards, the colleges will be subject to unfair funding criteria and will inevitably find more and more of the funds available going to the FE colleges. They are therefore threatened with gradual run down and eventual extinction, despite the recent DES/Welsh Office review which commended them for their work and gave them a new role in developing courses for access to higher education. They provide courses for a different type of student from those attending other establishments, and are immensely flexible.

To avoid that situation, the Secretaries of State, in their letters of guidance to the respective funding councils, should make explicit the exceptional limitations imposed upon the residential colleges and require the councils to safeguard the financial support given to them. An amendment to Clause 7 could bring that about. I hope that the Minister will comment upon the position of residential colleges in his reply. There is strong feeling on the subject.

I turn now to special needs. The interests of those with special needs are threatened by the proposals contained in the Bill. The Bill requires the funding council and the LEAs to have regard to the requirements of persons having learning difficulties. That requirement is contained in Clauses 4(1) and 11(8). However, that is a weaker formulation than the existing duties of LEAs under the 1981 Act and the 1986 disabled persons legislation.

There is no provision for an independent review of the requirements of individuals or for rights of appeal against the level or quality of support for students with special educational needs. The duty, as it stands, extends to full-timers in the 16 to 18 age group only. There is apparently no guarantee for older or part-time students with learning difficulties. I hope that we can amend the Bill to change that, and I ask the Minister to comment. At present the 1981 Act requires LEAs to provide assessments and statements of special needs for pupils in schools and sixth form colleges but not FE colleges. The Bill proposes that that requirement should not apply to sixth form college students. It seems totally wrong that all in that age group should not be treated alike.

Where a young person is covered by a statement there is a duty upon the authority to make the educational provision specified in the statement. We are worried that the Bill weakens that protection for a vulnerable group of people. We wish to see an extension of the provision for all young people age 16 to 19 and some more positive action to help those over 19 who at that age will not suddenly be different from what they were the year before and may need more time to develop and gain some qualification.

The ACC has recently surveyed its members on the issue of training provision for young people with special needs. There is substantial anxiety that developments in the funding and organisation of training, coupled with rising unemployment, are creating a lattice-work of provision through which some young people will fall. Considering the results of that survey, the association's education committee resolved that, were it to be adequately funded, an extension of the entitlement of the 1981 Act to youth trainees might provide an answer.

The fragmentation of post-16 education echoes the type of problems emerging in the training sector. A consistent entitlement for all 16 to 19s, whether in schools or colleges, would act as a considerable safeguard. That must, as experience in the schools sector shows, be coupled with adequate funding if it is to be successful. The LEA can support young people in its own institutions or elsewhere. Training and enterprise councils may provide within the employment and training programme. That might seem to be a healthy range of options, but there is a risk that when budgets are tight each agency may be tempted to leave its responsibility to another.

Such problems have already arisen between health authorities and education authorities in the case of services such as speech therapy. There is a clear need for a single authority to have responsibility for counselling and supporting young people with special needs, and agreeing with them and their families on the most appropriate provision to be made. It should then be the duty of the appropriate provider to honour what is required. The funding responsibility for additional costs associated with those needs should preferably rest in one place.

I shall conclude by mentioning two serious omissions from the Bill. One is the youth service. The statutory basis for that service will be weakened and we shall be tabling amendments in that regard. The other is the prison service. I do not have the time to expand on those matters but I hazard a guess that they will take up a considerable amount of time at the Committee stage as we attempt to make up for some of the inadequacies of the Bill.

5.50 p.m.

Lord Beloff

My Lords, preceding speakers, including the noble Baroness, Lady David, and the right reverend Prelate, covered with much greater authority than I can command the problems of further education. I wish simply to reiterate what I said earlier this week in regard to the Local Government Bill. I find no educational argument for separating further education colleges, still less sixth form colleges, from the secondary education system in which they are embedded and from which they draw their students.

As people will realise, I hate giving comfort to the noble Baroness, Lady Blackstone. But I must confirm what she said. Far from that portion of the Bill being universally popular, or resented only by Left wing authorities, the local authority of the impeccably Tory region of East Sussex is wholly opposed to losing its colleges, both for further and sixth form education. From what I gather, that is true also of many other Conservative-controlled authorities. It is not a party matter. It is a matter of educational principle. Where does one divide? Surely the age of 16 is not the point at which a division should be made between what is local and what is national.

As many noble Lords will regretfully be aware, I am chiefly concerned with Part II of the Bill. I regard it with total amazement and I shall explain why. If one were to ask any member of Her Majesty's Government, from the Prime Minister down to the lowliest Parliamentary Under-Secretary, "What is the great internal enemy facing this country?", the answer would always be, "Inflation". Yet the programme of higher education on which the Government appear to be embarking is essentially inflationary. Everything is to be sacrificed, and much is being sacrificed, to increasing the numbers of students at institutions of higher education.

As the noble Baroness, Lady Young, pointed out, there is no great need in this country—many needs in education take priority—to increase the number of graduates. As compared with our competitors—we are always being compared with them—the number of graduates in the population is much the same. It is true that other countries have enormous numbers of people who are half, quarter or partly in institutions of higher education. There are probably more students registered in some way, if they can get through the doors to do so, at the University of Rome than there are students in the entire United Kingdom. However, we know also that most of those students never graduate, in many cases never intend to graduate, and are indeed a drain on the resources, academic and financial, of those countries.

Although one may welcome a gradual increase in the number of those who have access to higher education, I believe that our welcome should be tempered by the knowledge that that means additional resources—not merely pro rata, but to a greater extent. The more one extends the range of people who can be admitted to higher education—different routes, different qualifications, different family backgrounds— the more important it becomes to give them the intensive teaching which has been the glory of British universities. The Government appear to have got it into their head that we can actually lower unit costs whereas the price of expansion must in many respects be to raise the unit costs, otherwise we are offering the next generation of students a false prospectus. We are saying that they will receive what their fathers and grandfathers received—those fortunate enough to go to university—but in fact we will not provide it.

That relates to what everyone so warmly welcomed, particularly in the presence of my noble friend Lady Perry —the abolition of the binary line. I wish I could think as well of the motives of those who are abolishing the binary line as I do of that conclusion. Whereas it is argued that it is an additional respect for the important place that technology and industry have in our affairs, it seems to me that it is nothing of the kind. In a sense it is the reverse. We are saying that we are so hidebound in our social snobbery that we only recognise the value of a place that is called a "university".

Occasionally, practical considerations have been advanced in favour of the change to university nomenclature—for example, that foreign students do not recognise or understand the idea of a polytechnic. I am afraid that that is nonsense. I met recently a senior member of the academic and governing staff of the Zurich polytechnic. It has no problem whatever about being called an école polytechnique. It draws students with great facility from all over the world. When one visits a French academic at a university, what does one find him doing? He is telephoning Paris to see whether he can get his hopeful offspring into the école polytechnique. His own university will not be enough for his bright boy!

The polytechnic notion is internationally understood. Mention has been made of the Massachusetts Institute of Technology. Why should we be ashamed of calling institutions, which have an enormously important but different vocation, by a name which indicates that vocation. I believe my noble friend Lord Dainton made the same point. It is a pity; it is a misunderstanding, but it is not the worst.

That brings me back to my notion of inflation. Not only is there a certain inflationary flavour about extending the term "university" not merely to the polytechnics—each of them individually, if they so wish, may be considered to have earned it—but also, we understand, to other institutions designated by the Secretary of State without any objective criteria in the Bill as to what they are to be. One cannot raise standards by changing nomenclature. The right reverend Prelate will correct me if I am wrong, but I suspect that it would be possible for the archbishop to say that as from next week every parish church in England will call itself a cathedral. I do not believe that it would either increase the size of the congregation or the acceptability of the services.

Therefore, there is an inflation, but it is worse than that. I feel the polytechnics believe—it is difficult to disabuse them—that the universities have an untapped source of revenue. The polytechnics believe that once they are called universities they will receive a great deal of money from the research councils, or some other source, which they are at present denied. I must inform the committee of directors, through the noble Baroness, Lady Perry, that there is no pot of gold at the end of that particular rainbow. What is much more the case is that a uniform funding council for all these categories of institution will have the effect of lowering the costs of some of them. That explains much of the extraordinary language about assessment, efficiency and other such matters which figures in the Bill.

This matter relates to my view that the priority of expansion which governs the Government's thinking —that is to say, the expansion in the number of students, not the number of graduates—is a mistaken one unless the Government are prepared to contemplate the serious implications in terms of resources. One must consider what we normally mean by the term "efficiency". British universities and polytechnics as they now stand must be among the most efficient institutions in this country. Apparently they are to be judged by businessmen who run some of the less efficient institutions of this country, as our trade figures frequently remind us. Our polytechnics and universities are efficient because, as I said, our young people who study at those institutions normally receive the tuition and instruction necessary for them to earn degrees, barring accident. Those degrees which are normally awarded after a three-year period of study are accepted throughout the world as the equivalent of degrees which, often, have been attained after longer periods of study. I cannot imagine how one can view that process as anything but an efficient one.

I do not understand how the Secretary of State can declare that we need efficiency audits, assessments and other such provisions. I sometimes wonder whether the Secretary of State would recognise a university if it came round the corner and banged him over the head. That is perhaps going a little too far. However, it is no good tackling any of the problems we have in front of us—I include here the often mentioned power given to the Secretary of State to intervene in particular institutions—by denying autonomy. That violates a pledge which this House and another place received from the Secretary of State's predecessor.

Whether we like it or not everything in this Bill revolves round the question of the matching of resources to programmes. If the resources are not available, the area to concentrate on is the 16 to 19 year-old age group. It is in that age group that we really suffer in relation to our Continental competitors. When our students in that age group attain the levels of their Continental counterparts, perhaps we shall have the resources to expand more rapidly the institutions of higher education.

6.4 p.m.

Lord Grimond

My Lords, this Bill does not give me any confidence in the stability of the Government's policy towards higher education, coming as it does after other Bills and debates, much of whose contents appear simply to consist of water over a dam which has been dispersed. The Universities Funding Council is now a thing of the past. Were it not that we face a general election which may save us from the danger posed by this measure, I should be rather afraid of education being invaded by the kind of bureaucratic Saint Vitus's Dance resulting from the introduction of annual Bills which has done such immense harm in local government.

At university I was taught that if one wishes to reform anything, one must before making any changes examine what is wrong with the existing structure. The first thing that universities themselves think is wrong is their lack of finance. The Bill does nothing to help them in the matter of finance. The universities also consider that their independence is already threatened. This Bill will make that threat much more acute—at least in England. The noble Lord, Lord Dainton, asked why certain provisions did not apply to Scotland. The answer is easy. At last, through painful experience in by-elections, the Government have learnt to avoid gratuitously annoying the Scots any more. However, the English are still open to such abuse.

It must be obvious to everyone that universities must be free to conduct their own affairs and to undertake their own teaching and research. They must in particular be free of government intervention. One only has to look at Clause 77 to appreciate how that principle has been violated in this Bill. Universities may be threatened by governments directly and should be free to criticise them if they feel that that is right. In this country today there seems to be a coalition between government and big business. They should keep out of the orbit of the universities. The universities ought to be free to criticise industry if they feel that that is necessary and they should be free to conduct their research and their teaching in ways which may annoy industry or at least may seem irrelevant to industry.

However, it is essential that universities keep in close touch with industry and business. That is the case at present, but it should be a free partnership. The position should not be one of client and paymaster. The universities should not have to look to industry or business to provide the major part of their finance.

The universities are at present overburdened with administration. They are bedevilled by committees, forms and returns on every side. Some noble Lords may recall that the late lamented Lord Swann drew attention to the form filling that was imposed on those conducting any serious programme of research. Are the Government taking any steps to relieve universities of that burden, which diverts some of the best brains in the country from their proper business of knowledge and obliges them to run committees and fill in forms?

That leads me to the term "accountability". It is a popular term, but what kind of accountability are we discussing? The Government admit that the research and teaching that are carried on in the universities and the polytechnics are of a high order. Presumably those institutions do not need to be made any more accountable as regards their main functions.

It may be said that the universities and polytechnics are unnecessarily extravagant. It is true to say that in some ways the provision made for students and for staff in this country is more generous than is the case in some European universities. However, it is rather comical for the House of Lords to insist upon accountability when it must be the least accountable Chamber in the whole world.

There is also something rather odd about the Government insisting upon good housekeeping. A few years ago I calculated that the total cost of running the House of Lords amounted to roughly half the expenditure of the University of Kent. The polytechnics are notoriously more efficient at running their affairs than the Government. The polytechnics could initiate some classes with the aim of improving the efficiency of the Government's administration. After all, this Government recently perpetrated an extravagant cock-up —unrivalled in democratic society for many years—the poll tax. Now they inform the universities and the polytechnics that they may be inefficient and that they must be made responsible and cost effective. That is rather curious.

Clause 66 lays a duty on the new councils to establish quality committees. It is extremely difficult, if not impossible, and probably inappropriate to try to assess the quality of higher education as though it were a product in a supermarket, by some rule of thumb or some external criterion. Of the teachers from whom I benefited at university at least three would certainly have failed any examination on orthodox teaching; it was the unorthodoxy of their teaching which was so effective. One may set up simple tests such as how many engineers a university or polytechnic produces or how many firsts its honours schools obtain but the benefit to the country and to individuals is unquantifiable and should remain so. A university cannot be assessed like a business. Universities must be left largely to make their own decisions as to whether they are achieving the right standards and to look to their reputation among their fellows and in the country in general.

In attempting to quantify universities' performance there is a risk of making them second rate. The virtues of a university—the opportunities for unusual thought, or genius—must go hand in hand with its vices. If one wants to provide opportunities for geniuses one must accept that one may also get idle people and eccentric people, and one may well get drunk people, who are not necessarily the worst. We must be careful about attempting to quantify quality and about setting standards for quality in the universities.

I turn lastly to the most serious handicap under which I believe higher education suffers today. It is that the powers that be do not seem to appreciate the importance of what is the distinguishing mark of a university. Newman wrote that: The true and adequate end of intellectual training and of a university is not learning or its acquiral, rather it is thought and reason exercised upon knowledge". A university should certainly gather, extend and disperse knowledge, but that is not all. It must also help people to use their imagination, to achieve happiness and to exercise judgment. To do that it must embrace not only science but at least history, philosophy, literature and ethics. Few things, I believe, are more useful in the world today than some knowledge of the relevant ideals of Greece and of Christianity.

Like many in this House I have lived through four of the greatest man-made disasters from which mankind has ever suffered: two world wars and the Nazi and Communist tyrannies. None was due simply to poverty or lack of practical training. They were all largely the fault of governments, of greed, of the pursuit of prestige, of mistaken values and of personal instability. It is in those areas that today we look to universities to give us help and advice.

I hope that in allowing other institutions to call themselves universities we keep that in mind. I trust that the inflation of which the noble Lord, Lord Beloff, spoke has not spread still further into our language. Already it is widespread. Every Minister calls himself either Secretary of State or ambassador, all secretaries call themselves executives, every rat-catcher calls himself a rodent officer. If that is all that we are doing to the polytechnics we are doing them no good at all. But if we provide them with the resources and acknowledge that they can perform what I believe to be the primary duty of universities that will be a very different matter.

I trust, too, as has also been said by the noble Lord, Lord Beloff, that we shall provide them with the resources to discharge their new functions. I also hope that by elevating them we shall not denigrate technical education. It is vitally important, but it is different from university education. The best I experienced was in the Army.

Today, when the Churches are weak and morality is singularly weak, more than ever we need universities to advise us on the wise use of knowledge. The problems of the environment, genetic controls, world poverty, inflation, nuclear developments, nuclear war and violence more than ever call for consideration by independent institutions embracing the wide spread of human knowledge and able, without fear of being unprejudiced by the desire for power or money, to advise us how we should handle our new knowledge. The only such institutions which we now have at our disposal are the universities, and we had better look after them.

6.16 p.m.

Baroness McFarlane of Llandaff

My Lords, it is my pleasure to be able to support a number of the proposals put forward in the Bill which the Minister introduced this afternoon. In particular, I support the proposal for the abolition of the binary line between universities and polytechnics, the granting of degree-awarding powers to polytechnics and some colleges, the establishment of the single funding councils for higher education in England, Scotland and Wales, and the establishment of a new national quality audit unit and quality assessment committees in the funding council. There are, however, as your Lordships would imagine, a number of matters to which I should like to return at Committee stage, particularly in respect of Clauses 64(2) and 77(2) dealing with the powers of the Secretary of State.

At this Second Reading, in the interests of time, I shall limit my remarks to the implications of Clause 76 under which the Secretary of State may, by order, provide for the dissolution of the Council for National Academic Awards. I do so because while for the last 17 years of my working life I was working in the university sector I was appointed by the Secretary of State to the Council for National Academic Awards. I have worked with its academic affairs committee, its teacher education committee and, in the council's early days, with its health committee. The noble Baroness, Lady Cox, is now chairman of that committee and will speak with far greater authority on its work.

Having had that experience both in the university sector and with the Council for National Academic Awards, I have to applaud the way in which that council has met the terms of its charter over the years. It was given the brief to approve degrees that were consistent and comparable in standard with awards granted and conferred throughout higher education in the United Kingdom, including the universities. It has been my experience that it has more than abundantly fulfilled the terms of its charter.

We owe much of the excellent standards of quality in the polytechnics to its work. Indeed, it is under the council's aegis that so many of the polytechnics have matured into institutions which now have accredited status. In other words, it has delegated authority to confer awards including, in some cases, research degrees. It is because of that work that we now have a cadre of institutions that can well take their place alongside universities. However, there are associated institutions—in some cases smaller colleges—which do not have that delegation of authority. I should like to deal with that aspect in a moment.

The Council for National Academic Awards is supportive of the Bill and does not wish to oppose the clause for its dissolution, but that should not be taken as an unconditional surrender. In its strategic plan it has stated that it wishes to ensure a smooth transition of as much as possible of the council's philosophy and practices; to transfer as far as possible its human and physical resources to the new system; to influence the new arrangements for quality assurance arising from the legislation; and to fulfil its existing obligations until the new arrangements are introduced. There is therefore a determination to see through its responsibilities until the new era is with us.

I want to cite four worries that I have about the dissolution of the CNAA while supporting that object in principle. The first is the fate of the smaller colleges which have not been delegated degree-awarding status and may not he able to achieve that. I understand that there are 70 such institutions. They are faced at present with the imminent demise of the CNAA with no one to validate their degrees and awards. It is essential that we have assurances as to how that work will be carried into the future. It has been rather loosely stated that they can find partners in either universities or polytechnics to validate their awards for them. That is not always easy and I should like to see some assurance given on that ground.

There is a particular group of independent colleges about which a number of us here are worried. We were delighted with Clause 62, to which the right reverend Prelate the Bishop of Guildford referred, and the mention of church colleges in that, but there are a number of independent theological colleges. I belong to an organisation called TARSC—the Theological and Religious Studies Consortium. That group includes colleges with proud traditions such as Trinity College. Bristol, Spurgeons, the London Bible College, Oak Hill, St. John's, and All Nations Christian College. Leo Baeck College has observer status.

When they first read Clause 72 those colleges expressed grave anxiety about their future because their awards had been validated by the CNAA and they had grown to trust it. At present they see no good way of having their work validated in the future. The time-scale proposed for the demise of the CNAA militates; against any effective take-over of that work. I was surprised to hear that the proposed time-scale for the dissolution of the CNAA is now in the new academic year, in October 1992. That gives little time for the smaller and independent colleges to have their courses validated.

That brings me to my second worry; namely, that the proposed time-scale affects the interests of students. at smaller and independent institutions. I understand that about 40,000 students are presently enrolled in those colleges and by next September the validation of their degrees will not be undertaken by the CNAA. We want some assurances as to how the interests. of those students will be catered for in the future. In addition, the colleges are now enrolling students for next September and many of them cannot guarantee what kind of degree programme they will come into. Again, it is right that the interests of those students and institutions should be safeguarded.

Thirdly, the proposed time-scale gravely affects the council's human resources. I was surprised to find that redundancy notices would be issued from the time of publication of the Bill; yet, as I understand it, the time-scale for the dissolution of the CNAA is not a firm one. There are so many uncertainties facing the very expert staff at CNAA, whom we should guard.

Fourthly, I am anxious about the proposed quality assurance and peer review methods. The language in that area is unclear and again I seek clarification. I share many of the reservations expressed by the noble Baroness, Lady Blackstone, and by the noble Lord Lord Dainton.

In summary, therefore, although we support the dissolution of the CNAA—one could say that no organisation has worked more assiduously and with greater effect for its own dissolution—we must protect what is happening. I am interested to see that in Clause 76 there is provision for property rights, liabilities and duties, but no provision for the interests of organisations, students and staff who may be left without guidance in the future.

Writing about those matters, the Principal of the London Bible College said: It is the intention of the government to establish a Quality Assurance Unit, charged with the task of monitoring the quality of tertiary level courses, and to add to that unit a second dealing with a system of credit accumulation and transfer. These are two residual functions of the CNAA. In fact, as other informed academics have commented, it begins to look very much as though having abolished the CNAA the government is reinventing it. And it is difficult to resist the conclusion that the government should add to these two units a third which could continue to validate degrees in those small institutions which can never hope to gain accreditation". I see the logic of that argument. I do not wish to see the rump of a weakened CNAA left, but we need an assurance that its work will be carried forward and not lost.

6.28 p.m.

Baroness Cox

My Lords, I am pleased to welcome the Bill very warmly and to pay tributes to the Government for introducing this significant legislation and to the higher and further education institutions which have worked so hard to merit the recognition and autonomy that the Bill will grant to them.

I should also like to pay a warm tribute to my noble friend Lady Perry for her excellent maiden speech and to say what a delight it is because I have pleaded for so long that there should be a senior representative of the polytechnic sector in your Lordships' House. Therefore to have my noble friend here as director of South Bank Polytechnic is a very great delight. I know that all her contributions now and in future will be warmly welcomed.

As your Lordships' House is fortunate to have so many representatives of the universities, I shall not dwell on issues raised by those with far greater university experience than I can offer. Instead I shall confine myself to matters concerning those institutions of higher and further education in the non-university sector. In so doing I must declare an interest in four instances. I have the privilege of being a governor of Bournemouth Polytechnic, visiting professor of Anglia Polytechnic, chairman of the CNAA Health Studies Committee and, since Tuesday, I am pleased to say, together with the noble Earl, Lord Longford, honorary fellow of the Polytechnic of Central London.

The advantage of those connections is that I have had an opportunity to discuss these measures with some of the representatives of those institutions. I am pleased to report that there is very widespread appreciation of many of the proposals in the Bill, particularly the proposals to remove the binary line in funding provisions and to enable polytechnics to use the title of university. Those provisions will enable them to operate on a level playing field with the universities and to prove their worth on academic merit and on their appeal to students in the quality and perceived relevance of their courses.

Polytechnics are rightly proud of their distinctive tradition, but the academic attainment, which the award of degrees under the aegis of the CNAA was intended to confer, has not always been translated into the reality of student perceptions in their choice of courses, or perceived by employers of their students after graduating. Here I disagree with my noble friend Lord Beloff because that has been a very real problem for polytechnics and their students. It has meant that too often polytechnics have been a second choice, not necessarily because of the quality of the courses, but because of the perceived difference in status and subsequent job opportunities, especially abroad, where the value of a polytechnic degree has not always been appreciated. Therefore the dissolution of the binary line and the freedom for polytechnics to compete on more equal terms in the academic marketplace are warmly to be welcomed.

I also wish to echo the widespread appreciation expressed in the FE sector for proposals to transfer FE colleges out of local authority control. While the contribution which many local education authorities have made to the development of further education has been appreciated, and always will he a very historic part of their tradition, it is now felt by many that the time is ripe for the benefits which autonomy will bring. Those institutions of higher education previously under local authority control which have already achieved such autonomy now rejoice in the freedom to operate in a streamlined way, with the efficiency and quick responsiveness which autonomy brings.

For example, during the past week I have heard great delight expressed by the director of one higher education institution and by the head of a secondary school, both of which recently gained autonomy from local authority control. They expressed delight at the speed with which they can take decisions and at the freedom to take those decisions which they, in their direct experience, believe to be in the best interests of their students. They expressed delight to such an extent that they said that that autonomy has resulted in giving them the most rewarding time in their entire professional careers.

I also welcome warmly the provision for schools to admit part-time and adult students to sixth forms. That can provide a more flexible provision for the 16 to 18 year age group, a significant increase in access to education for adults of all ages, a cost-effective use of teaching expertise and capital assets and a rewarding and stimulating educational experience for both teachers and students.

It is clear that I warmly welcome the great majority of significant, radical and indeed historic measures in the Bill. I have just two reservations which have already been mentioned by other noble Lords. The first is the proposed hasty shutdown of the CNAA with serious implications for a number of colleges and their students. The second refers to the issue of quality control.

With regard to the CNAA, on previous occasions my right honourable friend the Secretary of State has applauded the CNAA for its sterling work over the past 27 years, which has enabled so many polytechnics and other colleges to reach the maturity which justifies the provisions of the Bill. However, there are a number of matters relating to the implementation of the proposed changes which are causing grave concern to those 70 institutions which will not be eligible for degree-awarding powers and for their 40,000 students. This concern has already been mentioned by the noble Baroness, Lady McFarlane.

In particular, the accelerated timetable for the proposed dissolution of the CNAA is causing confusion and serious difficulties. I believe that there may be a difference between the formal proposed dissolution date of April 1993 and the likely effective down-tools date, which I understand is likely to be next September. But even April 1993 is a nonsense for institutions not accredited to award their own degrees because they will have to have made alternative arrangements by that date. I suggest that that is untenable for three reasons.

First, the time constraints mean that colleges may be pressurised into accepting relationships with other academic institutions—relationships which are unfavourable academically and financially. For example, those well respected independent theological colleges to which the noble Baroness, Lady McFarlane, referred, are of international repute but they are in a virtually impossible position at the moment. Linkage with universities which have faculties of theology mean that they will be entering into direct competition for students, but linkage with other institutions means that they will become subject to academic boards or senates which may not have expertise in or sympathy for theology.

There is also a problem of costs, not only for those independent theological colleges but for all the colleges caught in this trap, including professional colleges such as the British School of Osteopathy. The CNAA existed to facilitate high academic standards. It looked for no financial advantage in its relationship with colleges. The work undertaken by members of its committees is voluntary. Its registration fee for students is a mere £50. However, universities currently validating courses in non-degree awarding colleges are already asking six times that figure and more, which for those colleges will mean an increase of registration fees from £50 to £350 or more.

Universities and polytechnics will inevitably look for some advantage in their association with those colleges which are being pushed into a forced marriage. The need to provide a financial dowry could cripple some of those colleges. I suggest that their loss would also be a loss for the nation. The increase in registration fees could also act as a deterrent for many of their students.

There are two other problems for those colleges apart from costs. The first refers to the failure to honour commitments already given to students. Surely the spirit of the proposed Citizen's Charter require; students to be given a fair deal. But those 40,000 students in the non-degree awarding institutions who have already registered for CNAA degrees will not be given a CNAA award after next summer. They will have no choice but to accept an award from whatever validating body their college can find. Students applying for courses in 1992 have no idea what awards they will receive.

That puts the colleges and students in an impossible predicament and could constitute a breach of contract for students who have enrolled on courses which they believed would yield a CNAA award. I have been informed in discussion with many of these students that the possible alternative arrangements currently under discussion would not be seen by many of them as satisfactory, especially those students from abroad, where the CNAA has gained a very high reputation.

Finally, there is a small but important category of students who seem to have been entirely forgotten by the Government at the moment. I refer to the 500 research degree students registered by the CNAA through non-educational establishments, such as industrial and commercial organisations, research laboratories and hospitals. I therefore ask my noble friend the Minister whether he will give an undertaking to reconsider the problems of academic validation in that small but very significant part of higher education.

Perhaps I may urge that the CNAA, with its rich resources of expertise and experience, may be given a prolonged remit to complete those important residual functions. It seems somewhat ridiculous to create havoc and to cause intense anxiety to people undertaking excellent work by setting up unsatisfactory or uncertain new arrangements in great haste when there is already an existing body of proven worth capable of completing its valuable service in an appropriate timescale.

The only remaining issue I wish to raise is quality control. I understand and respect the concerns expressed by noble Lords over interference with academic freedom. I am a passionate believer in academic freedom. However, I am also aware that there is a need for some mechanism to ensure academic standards. In my experience in both the university and polytechnic sectors I have been deeply impressed by most of the work that I have encountered. But I must confess that there have been times when I have been disturbed by examples of less than adequate academic work in both teaching and research. I have had the temerity to criticise some work publicly as academically disreputable. This not only gives students academic short change but it also abuses precious and finite resources. I shall therefore listen with great interest to the forthcoming debates on how a compromise may be reached to achieve quality assurance while preserving that fundamental principle of academic freedom.

With that anticipation of subsequent stages of the Bill, I conclude by warmly welcoming the Bill and expressing a sincere hope that the problems to which I have referred will be resolved satisfactorily so that the Bill may make its way on to the statute book with all speed and bring in the immensely valuable benefits that it is designed to give to further and higher education in this country.

6.41 p.m.

Lord Kennet

My Lords, perhaps we all underestimate the extent to which poor quality teaching and insufficient and poor research may arise from a factor which was mentioned by the noble Lord, Lord Grimond. It is the amount of time that university and polytechnic teachers and others have to give up to fund-raising. Through my experience with the parliamentary and scientific committee, I believe that it would not be irresponsible or flippant to attribute part of the relative decline in technology and science —it is relative compared with others—to the fact that it is always the top man appointed to the top job who has to argue the claim for money from the private sector. Even the most understanding and broadminded of private sector donors seem always to insist on seeing the top man. Therefore he is taken away from education and research.

The top man may be tempted to hire a fund-raiser to relieve him of the burden of that work. However, it is only too likely that that person will say, "I'm sorry, they want to see you", and the expenditure on his salary may be totally wasted. I make that general remark.

The Minister said that the Bill was part of a programme of reforms designed to devolve responsibility in our education system. That is double-speak. I considered at first whether that word was too harsh; perhaps, I thought, I should call it one-and-a-third-speak or 1.9-speak. But it is a fully fledged example of double-speak. Insofar as the Bill affects devolution or centralisation, it is a 100 per cent. centralising Bill. It proposes to remove more than one class of colleges from decentralised and devolved local government and place them under the direct control of a body set up by central government. For the first time a Minister of the Government is given direct control of the affairs not only of polytechnics and colleges but of universities too.

The Minister stated that the Government aimed to establish parity of esteem between one class of educational institution and another. My thoughts were, "Here we go again". I remember that argument from 45 years ago. In those days discussion may have involved comprehensive and grammar schools or state and public schools. I forget which; it does not matter. The government of the day—it was a Labour Government—was seeking to establish parity of esteem between two types of schools. Our Government are now seeking to do the same with two types of further and higher education establishment. If "esteem" means esteem in the opinion of the people, then it is wrong for the Government to seek to establish such a change. It is manipulation of public opinion. On the other hand, if it refers to esteem in the eyes of one of the regulating bodies, the funding councils, which are to be set up, then it is their duty to define that further. Esteem in what respect? How are the different categories of education institutions to seek to attain higher esteem in the opinion of those funding bodies? One must consider that. The concept is out of place in a democracy and in particular in the education sector of a democracy.

I have two questions relating to the Privy Council and the names. They are the questions of a naive outsider. First, what are the qualifications that make privy counsellors better judges of the matter than others in the country? What advice will they be able to draw on to make up any deficiencies from which a given set of privy counsellors may suffer? It is not clear to me.

Let us take London as an example. If a polytechnic is judged worthy of the name university—which by tradition is supposed to be a superior name—is it automatic that that polytechnic must be set up as a new university? Should it not become part of the nearest established university? There may be reasons against that, but I believe that it would be worth considering them. In London there is one great sprawling university, Brunel University and others. There are a large number of polytechnics. Is it a rational division to have one huge sprawling university, several smaller universities and several still smaller, more recent universities dotted about here and there? I urge the Government to consider that.

The intervention of the Secretary of State in the affairs of certain institutions has been decried and abhorred by many noble Lords. I shall not go into the arguments again. Such intervention goes against the entire fabric of a free education system. Governments are always trying to achieve that. It is about the third time that an attempt has been made in my lifetime. Such attempts are always fought off without too much difficulty, as I imagine will occur again. It would be a dangerous day for this country if that did not happen.

Why does the issue matter so much? I am reminded of the words of Michael Oakeshott, a professor of political philosophy at the London School of Economics, at one time broadly accepted throughout the Conservative Party as an acceptable guide to the modern world. He said that a university is not a dinghy that can be joggled about to catch every passing breath of wind. The desire of the Secretary of State to have the power directly to tell this or that university what it ought to do in this or that case is equivalent to the statement that a university is a dinghy and that the Secretary of State may seize its tiller whenever he feels like it. Some Secretaries of State may go down in history as being grand tillermen. Others may be recorded as somewhat incompetent tillermen. This is a category mistake. It is clear that universities create governments; governments do not create universities in the human and intellectual sense. That which is created by a given class of social institution has no right to joggle that class of institutions about. Governments have an ontological duty towards the independence of universities because they are the creatures of the universities, though 40 years later.

6.51 p.m.

Lord Renfrew of Kaimsthorn

My Lords, in the words of H. G. Wells: Human history becomes more and more a race between education and catastrophe". It is with some satisfaction, therefore, that one sees the Government embracing the former option and thus aiming for a 50 per cent. increase in the number of home students in higher education in this country from 1989 to the year 2000. This is strategic planning on a grand and ambitious scale, and I am grateful to my noble friend Lord Belstead for presenting the picture so clearly in his introductory speech. I am also grateful to my noble friend Lady Perry for her splendid maiden speech which has contributed so much to the debate.

The abolition of the binary line, if it means greater access to university education for students from all social backgrounds, is warmly to be welcomed. As a university professor I shall restrict my remarks today to higher education. While applauding this splendid initiative it is perhaps necessary to examine more closely what it means in practice and to invite Ministers to be wary of the several pitfalls which lie ahead, some of them not altogether avoided in the White Paper which preceded the present Bill.

Although the Bill transforms at a stroke the nation's polytechnics into universities, nowhere, so far as I can see, does it define what is meant by a university, nor indeed a polytechnic. Nor does it establish exactly what is achieved by the transformation. Surely more is implied here than the assertion: That which we call a rose By any other name would smell as sweet". To be persuaded that the change is beneficial we shall need to feel confident that the former polytechnics are improved by this change and that the existing universities are not suffering: that this is a case of levelling up rather than levelling down; that it is a case of abolishing the binary line rather than perhaps raising it.

My own college within the University of Cambridge is defined in paragraph 1 of its statute 1 as: a place of education, religion, learning and research". In my remarks I wish to emphasise and define three essential elements: first, research interacting with teaching; secondly, academic independence; and, thirdly, the resources necessary to ensure high quality.

Knowledge and the practical power which knowledge brings is advanced by research. I can conceive of no university in which research is not encouraged and facilitated. In particular, in most universities academic staff have a contractual obligation to undertake research as well as to teach and this is a criterion for academic advancement in those institutions. While accepting that there will be differences of emphasis and in the amount of funding available via the research councils, I should like to be assured that all university academic staff will be encouraged to undertake some research.

This need not be a huge drain on funding, for while project work, especially in the sciences, may be funded mainly through the research councils, the crucial resource, especially in the humanities, is time. The dual support system, whatever its present limitations, makes provision for lecturers' time and for libraries, both to be devoted in part towards research. I should be grateful if the Minister would assure us that this will be as true for the new universities as for the old. I see no reason why it should be difficult for him to give that assurance.

Secondly I turn to the issue of academic independence. The noble Lord, Lord Dainton, contrasted Section 134 of the Education Reform Act 1988 with the different provisions set out in Clauses 67(2) and 77(2) of the Bill. They empower the Secretary of State to intervene directly in named and specified universities and their affairs. As yet Ministers have given no explanation of the change which has been deplored by almost every speaker today and applauded by none. It may be appropriate for the Minister to follow the advice given by my noble friend Lady Young and to consider amending the provision. If not, whatever the Minister's eloquence he may have difficulty in persuading Members on this side of the House, let alone the other, in following him.

There must be opportunity for research, academic independence and now, thirdly, resources for excellence. Economies of scale there may be and we can all applaud the Government's determination to run a tight ship. A 50 per cent. increase in student numbers, now all at university and no longer at polytechnic, may not require a 50 per cent. increase in funding in real terms. However, it will need something. I turn again to research funding. The White Paper indicates that in 1989–90 the UK received more than £1,600 million for research against only £70 million for the existing polytechnics. Surely once these polytechnics are universities they will need more than £70 million for research. But can we have some assurance that the provision for the pre-existing universities will not be reduced? This is surely one place where some modest increase in funding must be provided if the great transformation is to be more than a cosmetic change in nomenclature.

Perhaps I may ask Ministers to give consideration to the institution of a humanities research council if research funding is increasingly to be transferred from the funding council to the research councils? In research the humanities are inexpensive; they give good value. But while they may have the income of a Cinderella surely they need not have the formal status of a Cinderella. I have heard a suggestion that a humanities research council might be set up and instantly merged with the Social Sciences Research Council Without discourtesy to my colleagues in the social sciences, I ask my noble friend to recognise the difference between a Cinderella and an ugly sister. Surely there we have one distinction, one binary line, which need not be abolished.

In conclusion, I stress that these observations are intended to he helpful. They are matters to which further consideration may need to be given if the imaginative and laudable initiatives outlined in the Bill are to achieve the success which we all wish them.

6.58 p.m.

Lord Flowers

My Lords, I am pleased to follow the noble Lord, Lord Renfrew, because I agreed with so many of his comments. Like the noble Baroness, Lady Young, I have no difficulty with a great deal of the Bill, although I shall address my remarks to the higher education aspect. I too support the final abolition of the binary divide between the universities and the polytechnics. I am happy to make that declaration on the day on which the noble Baroness, Lady Perry of Southwark, has made her maiden speech. I also welcome the intended expansion of both sectors and the emphasis on raising academic standards.

However, I have reservations and I shall mention only three. I agreed with the remarks made by the noble Baroness, Lady Seear, in particular the danger of drawing too sharp a definition between academic and vocational education. I beg the Government not to base their thinking on that distinction because it is false, as the noble Baroness explained so eloquently. My first reservation about the Bill is that the diversity within each of the further and higher education sectors should be encouraged and not eliminated. I very much agree with what my noble friend Lord Dainton said about that.

In the higher sector, I welcome the intention to apply common criteria to the judgment of academic excellence and research achievement. That will itself produce a certain grading structure. However, diversity must be qualitative and not merely quantitative. In future the criteria must allow success to he rewarded across a very wide spectrum of institutions. If teaching is more successful in attaining its objectives in some polytechnics than in some universities, that must be rewarded. Likewise, if applied research and community links are better in some universities than polytechnics, those too must be rewarded. The result may not be to everybody's liking but so be it.

Nevertheless, a broad range of objectives should somehow be maintained. How will that be done? In fact, the Bill says very little about that. Apparently those matters are to be settled in private between the Secretary of State and the new funding councils. To me it seems so important that I am not sure that the matter should be left in that way.

My second reservation concerns the additional powers which the Secretary of State wishes us to confer upon him. When I first read Clause 64, especially subsection (2), I was unclear as to the precise intention. Did he wish to impose specific requirements on individual institutions? When I read Clause 77 there was no longer any doubt. Under subsection (2) he can instruct the funding councils as to how much money they should give to particular institutions for particular activities. That is monstrous. It totally undermines the general convention whereby the Government do not interfere in the affairs of individual institutions. That is the basis of university autonomy in this country, which is soon to be shared, I have supposed, by the polytechnics. I am glad that Ministers may be prepared to think again about the drafting of that part of the Bill.

Perhaps the solution to the problem lies in distinguishing carefully between the accountability of the institutions to government after the event, so to speak, which we all accept, and the powers of government to instruct institutions what to do academically before the event, which we do not accept and which is unnecessary.

There are also proposed powers whereby the Secretary of State may order an academic audit of an individual institution. Clause 78(2) appears to undermine the Royal Charter or statutes of many, if not all, universities. If the Government persist, I assure them that those matters will attract a great deal of opposition at later stages of the Bill.

However, I am not sure that the desire to increase the powers of the Secretary of State necessarily springs from Ministers, although of course they must take the blame. It has been a constant source of anguish to the civil servants of the Department of Education and Science that their powers to interfere in the internal affairs of universities are so strictly limited, although they never cease to try.

Quite recently a former very senior staff member of the DES —a man whom I otherwise admire and for whom I have much affection—tried to bring pressure on a certain university to correct what he deemed to be a lack of political balance in some of its academic courses. He was probably right but that is not the point; it was not his business. That is why we need academic autonomy.

The same person also tried to interfere very seriously with the internal governance of a university which I know rather well. Of course it must be infuriating sometimes not to be able to take a hand in events, but so far it has been against the custom and the law for civil servants to do so. In our treatment of the Bill, I hope that we shall uphold existing custom and law in those respects.

My remaining worry, which I seem to share with the noble Baroness, Lady Blackstone, is that the Bill fails to reveal where we are going. Like the Education Reform Act, it is all about mechanisms and not objectives. I remember during the passage of that Bill that Mr. Robert Jackson gave repeated assurances that in spite of the manifest similarities in the provisions for the UFC and the PCFC, the Government had no intention of merging those two bodies or, as he said on one rather less public occasion, at least not until after the next election. Now—and before the next election—we are asked to do just that. With a Government who seem so unsure of their objectives, what are we to believe?

Now the further education funding councils are being set up in the image of the UFC and the PCFC. Do the Government have in mind before the next election but one, if they win the next one, to merge further education with higher education? There may be some merits as well as difficulties, but we should know what they have in mind. In the meantime, do the Government intend to confer upon further education institutions similar degrees of autonomy to those enjoyed by higher education? I do not quite see the point otherwise, unless it is merely to spite local authorities irrespective of the damage caused to the institutions, because I cannot see how a single body for England, for example, can effectively execute all the managerial functions which at present fall to the English local authorities, however imperfect the latter may be sometimes.

Again, what about curricular matters? We now have a national curriculum in schools, although not without some development pains. Much attention is being given to corresponding arrangements for the 16 to 19 year-old age group and rightly so, otherwise much of the point of the national curriculum would be lost. Consequently, higher education will soon be faced with a different intake: broader in subject coverage, shallower in the depth to which individual studies are taken, and the institutions are trying to increase access in any event.

Meanwhile, the UFC is encouraging the universities to introduce modularity of courses and transferability between institutions which, taken with a national academic audit, already implies a measure of uniformity and co-ordination. Does all that suggest to the Government that in due course there should be a national curriculum for first degrees? If that were so, that would temper many of our thoughts about this Bill's provisions.

I believe it was an American football player who first said, "If you do not know where you are going, you may find yourself some place else". This Bill is about much more than football. I urge the Government to look beyond the mechanisms and the White Paper and to be clearer about how they see the future of further and higher education. They still have an opportunity to do that later this evening.

7.9 p.m.

The Earl of Limerick

My Lords, it is a pleasure to follow an academic of such distinction as the noble Lord, Lord Flowers, who has made some powerful points to the House this evening.

I begin with a general and warm welcome for the Bill and with gratitude to my noble friend Lord Belstead for the manner in which he introduced it. The basis of that welcome is explained in part by a declaration of my interest as chairman for the past seven years of the board of governors of an inner London polytechnic. We were liberated by the Education Reform Act 1988, and have benefited—I was going to say immeasurably, but I shall amend that word and say in fact very measurably—from that freedom.

This Bill takes forward a positive trend in polytechnics most obviously, but by no means only, by bringing titles into line with universities. As a graduate myself of an oldish university—I speak of Oxford—I say robustly that in certain regards I think it is not a case of the polytechnics wanting to be more like the universities, but wondering how long it will take the universities to see the merits of being more like us. I would be in no hurry at all to shed the proud and prestigious—increasingly prestigious—name of polytechnic but for one point already made in the notable maiden speech of my noble friend Lady Perry, and that is marketability; the marketability of our courses overseas, where the word "polytechnic" means many different things, but nowhere, I believe, except in France is the title as prestigious as it is becoming here.

I should, even in his absence, comment on one point on which the noble Lord, Lord Kennet, based an argument, and that was about the relative sizes of polytechnics and universities. He implied that even the largest polytechnics were small in relation to the smallest universities. That is simply not the case. My own polytechnic has 15,000 students, many of them of course part time, but that number is greatly in excess of many universities, and indeed our business faculty exceeds in numbers many of the smaller universities.

I had thought that this Bill had a good measure of bipartisan or even tripartisan support, at least in its provisions for the higher education sector. I had thought so until I listened to the noble Baronesses, Lady Blackstone and Lady Seear. It seems that we are in for an interesting Committee stage.

In the brief time that I shall speak I should like to refer to two implications of the Bill and to two of its specific provisions, but without detracting from my general welcome. The first implication is for research funding. Our present understanding is that the quantum of support in real terms will not change significantly, and further that it is likely to continue to he directed to basic research in departments currently being funded. In other words, there will be little change in direction.

In current jargon, if the playing field is bounded to the north by the universities, to the south by the polytechnics, to the west by basic research and to the east by applied research, then there is a bias, in that the heavy funding balls will continue to roll to the north-west corner where basic research and universities meet. The pitch, I believe, needs some levelling. There is a rogue mound in the middle, which I learn is called strategic research, which moves in the direction of applied research, provided, I am told, that it does not lead to specific, marketable products! We all understand and accept the need for seed corn, but I, for one, must question the utility of this limitation. Perhaps the research councils will be more readily persuadable that polytechnics do do research, and that an increasing percentage of it is worthy of support.

The second implication of the Bill is in favour of capital support as opposed to recurrent funding. I make only the simple and general point that the stock of buildings in the condition handed over to polytechnics and HECs by local education authorities in 1988 was desperately substandard. As revealed by the Hunter Report, the cost of the Stage 1 work alone across the 90-odd institutions of the sector—that is, merely meeting the requirements of the health and safety at work legislation—ran to hundreds of millions of pounds. The allocation that the PCFC was able to make in 1990–91 was £16 million and in 1991–92 was £40 million. A start has been made, but it is still far from moving into the Hunter 2 category; namely, major capital works on what might be termed basic requirements—roofing, for instance. It will take more than this to remedy generations of neglect. The institutions concerned are putting reasoned and costed proposals to the DES and funding councils. This is the most pressing need.

I turn to two specific provisions in the Bill. The first—already widely aired—relates to the powers of the Secretary of State as proposed to be conferred in Clause 64(2) and Clause 77. The comment generally has not been supportive. I ask those who have spoken so eloquently for the universities to accept that the concept of academic freedom is cherished also in polytechnics. That said, I understand why a central government that proposes to disperse £4 billion a year in support of higher education wishes to retain a reserve power over any possible misapplication. Such provisions are found in other Bills governing sectors of major public expenditure. Like others, however, I am inclined to think that Clauses 64 and 77 go rather beyond what is necessary for this purpose, and no doubt some compromise will be sought at a later stage.

My final point concerns Schedule 6 to the Bill. The small print of the rules in that schedule includes some arcane distinctions, neither the purpose nor the arithmetic of which is limpidly clear. Let me concentrate on the underlying intent, which is to reduce the maximum size of the board of directors of a polytechnic from 25 members to 22. Why 22? Apparently this is to be done in the name of "a more executive style", but any real change would have to go beyond tinkering with numbers. Coupled with this is the removal of protected places for staff governors, student governors and representatives of local education authorities. About that I shall say two things. First, I welcome the discretion and, secondly, my board does not intend at present to use it because the members we have in all those categories are helpfully contributory and we should like to retain them.

The general view of polytechnic chairmen—and I had the opportunity to consult many of my colleagues only two days ago—is, first, "If it ain't broke, don't fix it"; secondly, if you trust us to preside over boards of independent educational institutions, trust us and our colleagues also to decide on the size and the balance of our boards. The prescription enshrined in Schedule 7 to the 1988 Act was absolutely necessary to break the old mould, but only three years later—and it has taken me three years to get the board I believe we need—is too soon for us to be told that we have to lose any of the members who give their time to make quite individual and distinct contributions. This question will be revisited in Committee. I end where I began: with the minor exception of Schedule 6, I warmly welcome this Bill.

7.18 p.m.

Lord Rochester

My Lords, I shall be brief, for I have only one point to make. The noble Lord, Lord Belstead, will recall that at the Second Reading of the School Teachers' Pay and Conditions (No.2) Bill last June I said that if the pay of teachers in primary, secondary, and grant-maintained schools was to be determined by an independent statutory review body, it was difficult to see why universities, polytechnics and colleges of higher and further education should not be treated in the same way. The matter fell outside the Long Title of that Bill, and so I could not pursue it at a later stage. As I understand it, the same difficulty does not apply in the case of this Bill, and I am therefore returning to the subject now.

Under the discredited bargaining system applicable to universities the Secretary of State effectively has a veto over settlements reached between vice-chancellors and the Association of University Teachers. In the 1987 White Paper on higher education the Government acknowledged that the current negotiating machinery for university lecturers was defective. However, nothing has been done to improve it. I have some experience because for 10 years until recently I was chairman of a university council. There is a widely perceived unfairness, as the CVCP has said, not only in the way the salaries of university teachers are determined, but in their salary levels.

It is the wish of both the CVCP and the AUT that the pay of university lecturers should be determined by an independent review body. In his statement in another place, giving reasons for the establishment for such a body for school teachers, the Secretary of State said that, we want to raise still further the esteem in which the teaching profession is held in society".—[Official Report, Commons, 17/4/91; col. 433.] Surely that statement should have equal application to teachers in higher and further education and be validated by a policy that enables all teachers to have their pay determined in the same way. For my part I can see no reason why such a policy should not be accommodated within the framework of the further and higher education funding councils proposed in the Bill.

The Government's decision to set up a review body for school teachers was made on the basis that those teachers would not in future take industrial action on matters within the review body's ambit. In my view that principle should have equal application to university and college teachers who have this year rejected industrial action in support of their pay claim.

I could go on, but this is not the time to do so. I do not see the logic of the Government's position in having established a review body for one element in education, namely, school teachers, but declining to do so for others. When I asked a Starred Question in July, I was struck by the extent to which noble Lords in all parts of the House shared my anxiety. If the noble Lord, Lord Belstead, can say anything to help dispel that anxiety, of which he knows, then I hope that he will do so. It is a matter to which I may wish to return in Committee. Unfortunately, I do not believe that it will be possible for me to hear the noble Lord's response as I have to return to Cheshire tonight. For that I apologise both to him and to the House.

7.23 p.m.

Baroness Carnegy of Lour

My Lords, I shall try to be very brief about four points in the Bill which are of particular interest to me. I also wish to ask the Government two questions. I refer first to the changes in further education and the Bill's effect on what has been described during the debate in a form of shorthand as non-vocational adult education. The moving of further education colleges out of local authority control, though not welcomed by a number of noble Lords who have spoken during the debate, is in fact widely welcomed by the colleges themselves. I say to my noble friend Lord Beloff that that development is welcomed on educational grounds by the colleges.

It is interesting that the National Association of Head Teachers, which represents head teachers of schools as well as a substantial number of college principals, has sent a brief which is by no means unsupportive of the Bill. It emphasises that the independence of colleges in the FE sector must be genuine. I am absolutely sure it is right about that. As to the effect of the changes on adult education, I cannot see, as several noble Baronesses on the Benches opposite have seen, that local education authorities will find themselves forced by the Bill to spend less on much valued non-vocational courses. My guess is that they might well spend more. They will continue to be funded by central government, who run the courses as they are now. The decision, as now, as to what they spend as well as what charges they make for courses will continue to be entirely a matter for them. The constant pressure that there has always been within local authorities to shift resources out of non-vocational courses into job-related further education will have been removed.

With non-vocational further education now the main adult educational interest of councillors, it seems that it is likely to flourish as never before. As the Association of County Councils points out (and the point is endorsed by the principal of Paignton College) the new practical problems that will arise will be particularly difficult for small local adult education centres which run non-vocational and vocational courses together. I believe that the noble Baroness, Lady Seear, spoke clearly about that. They will have to seek funding from at least two directions—from the LEA and from a college.

I remember this same anxiety being expressed some years ago when the Manpower Services Commission began funding local authority adult and further education courses. People soon found mechanisms then that worked. Those mechanisms have now been adapted for obtaining funding from TECs. I do not believe that obtaining funding from further education colleges will be any more difficult; it will just be different.

My second area of particular interest has been discussed already by a number of noble Lords and that is the future of students. That was referred to in particular by the noble Baroness, Lady McFarlane of Llandaff. I refer to students in smaller institutions whose degrees have hitherto been validated by the CNAA and who have not, for whatever reason, made their own arrangements for future validation by another institution. That was a problem also mentioned by the right reverend Prelate the Bishop of Guildford.

It seems essential that whatever arrangement is made, students should be able to gain the CNAA degree for which they registered if they so desire. That is important. As a member of the council of the Open University I am aware that discussions are going on now, at the instigation of the CNAA, about the possibility that that university, which has a locus throughout the United Kingdom, might take on some of the remaining functions of the CNAA and particularly the peer review and degree validating role which several noble Baronesses have referred to as a problem.

I do not know whether the plan will go forward, but should that happen I suggest that it would be helpful for the Privy Council to be asked to consider conveying the charter of the CNAA to the Open University, at any rate in the short term. Existing students would then be able to choose whether the degree they completed should be the CNAA degree for which they registered or an Open University degree. I ask my noble friend whether the Government are looking at that. That provision would be greatly in the interests of many thousands of students who are wondering what is going to happen to them.

I would add that the noble Lord, Lord Perry, who was the first Vice-Chancellor of the Open University, has told me that he considers this plan to be workable. He cannot be here today. Had he been, he would have made a plea for keeping, under another name, the whole apparatus of the CNAA and having statutorily applied peer review for all degree awarding institutions, including universities. Failing that, he feels that the Open University role I have described is a possible way forward for certain students.

My third point concerns the relationship of this Bill to the Further and Higher Education (Scotland) Bill. The setting up of a separate Scottish Funding Council is widely welcomed in Scotland, but it may be that certain aspects of higher education will require to be dealt with United Kingdom wide. Can my noble friend say whether the Bill allows this? I know that it allows all three funding councils to participate, if they so desire, in the funding of the Open University—the Open University welcomes that—but will it also allow for, say, United Kingdom wide quality assessment arrangements or consideration of medical school provision across the whole of the United Kingdom? That latter point has not yet been discussed properly by the Scottish Principals. It is important to ensure that the Bill allows for such treatment of the planning for medical schools.

Lastly, I should like simply to join other noble Lords in welcoming my noble friend's assurance in his opening speech that the Government will have been listening to comments about Clauses 64 and 77 and will pay great attention to any amendments that are put down.

7.32 p.m.

The Earl of Longford

My Lords, the noble Baroness will forgive me if I do not follow her into the realms of Scottish education. As it happens, by chance I have six Scottish grandchildren, but that does not qualify me to speak on matters Scottish. Therefore I shall turn to areas more familiar to me.

I was going to confine my remarks to the polytechnics and the WEA but I have been instructed by my acting leader, my noble friend Lady Blackstone, to say a few words about the signal absence of prison education from the Bill. The House may ask whether it is possible for me to make a speech without bringing in prisons. I am reluctant to do so, but my noble friend must be obeyed. I shall therefore deal for a moment with prison education.

When we discuss prison education—and looking around, I see present many noble Lords who have the pleasant sideline of visiting prisons—most of us think of people who receive Open University degrees, which is very notable. One must also think of people at what might be called the other end. I wish to mention one person who, as a young man of not quite 16, shot and killed a policeman. It happened many years ago but the principle is just the same. A boy, a rather older mentally handicapped boy of about 19, was hanged, one of the cruellest miscarriages of justice of all time. Efforts are still being made to rectify that miscarriage of justice. The boy who was nearly 16 was dyslexic. He could not read or write. He came of educated parents but he happened to be dyslexic. It took prison to teach him to read and write. I visited him in the early days when he was illiterate. Yet he acquired quite a good mastery of writing and certainly of reading. That is one example at the bottom end.

Right across the spectrum, whether one thinks of illiterate people receiving a minimal or basic education or of people receiving Open University degrees, there are nearly 50,000 prisoners under our control. I am told that the number has increased by 4,000 this year, having dropped in the previous year. It is for us to say what is done with them. I am sorry that there is no reference to them in the Bill. I take the word of my noble friend Lady Blackstone that there is no reference to them and I am looking to her to rectify the position. I shall give her any support that I can at the next stage.

I turn now to polytechnics. This subject has already been dealt with by some of the best speakers in the House, including my noble friend Lady Blackstone and the noble Baroness, Lady Cox. I did not hear the beginning of the noble Baroness's speech so it is perhaps the case that she was too modest to mention the fact that two days ago an honorary fellowship of the Polytechnic of Central London was conferred on her. I am not such a modest type—in old age one becomes less modest. I shall therefore make no secret of the fact that I followed her in receiving that great honour. She has done far more for the polytechnics than I have. At any rate I would be one of the first to speak up for the polytechnics in this House. I speak in that sense. The polytechnics have not asked me to speak. I cannot remember when anyone actually asked me to speak, but I speak as a great admirer of the polytechnics.

In that sense I welcome what the Government have done in their splendid historical development. I need not say much more than that because it has already been said so well. I do not want people to feel that the polytechnics are ungrateful. However, I do not want people to feel that they are easy in their minds. There is a great anxiety hanging over them—it seems to hang over all the speakers I have heard in this debate—concerning the terrible power given to the Secretary of State to do what he likes with any institution, whether university or polytechnic. I say "university or polytechnic" but polytechnics are to become universities. With any luck the polytechnic that so recently conferred such a great honour on the noble Baroness and myself will re-emerge as the University of Westminster. That is a very happy prospect.

What causes great anxiety to the polytechnics and to everyone else is Clause 77. I had not previously given the Bill the careful scrutiny it deserved but since being guided in that direction I have looked at Clause 77. It is quite astonishing. The civil servant who drafted it was trying it on. He surely could not believe that it would ever pass into law in that form. It is a scandalous piece of work. Perhaps it is a Civil Service idea of a joke. At any rate I am sure that it will he profoundly contested at later stages. Nevertheless, it would be wrong of anyone who in any sense spoke, however indirectly, on behalf of the polytechnics to do other than express a warm welcome for the Bill in general terms.

That is not the situation for anyone who has been approached by the WEA. The House has heard me before describe the story of my engagement to my wife in a waiting room in Stoke-on-Trent when we were both teaching for the WEA. That casts a romantic glow over the whole thing. But that romantic glow is no substitute for adequate funding. The WEA is very worried indeed. It may be that on this occasion the Minister will be able to set our minds a little more at rest then was the case when last we discussed these matters. On that occasion I pointed out that when teaching for the WEA I spent a good deal of the time teaching political theory while my wife taught English Literature. Those subjects would now be called so far as I know—I suggested it then and no one contradicted me—a leisure pursuit.

I do not know whether the noble Lord, Lord Belstead, who knows the education scene so well, will be able to provide any reassurance. I can speak for one section of the WEA. I can assure the House that it views with horror the maintenance of this distinction. On the previous occasion I discussed this matter I gave examples from my own experience, but on this occasion I shall quote one passage from a document the WEA has sent to me: Such a distinction means that the extensive work done by the WEA in what might be called role education or citizenship education—for example, school governors courses, courses for other voluntary organisations, courses for community groups on inner city housing estates … would all be labelled as leisure and recreation courses. As such they would receive less support and might well be lost if either the funding council or the local education authorities withdrew their support". As there are many speakers on the list, I do not know whether the Minister will have time to deal with all the issues that have been raised in detail. I am not sure that he will be able to give any reassurance on this matter. However, I am sure that we shall hear a great deal more about this before the Bill ever gets near the statute book.

7.40 p.m.

Lord Butterworth

My Lords, I must first apologise to the Minister as I may not be here when he replies to the debate. I have an inescapable commitment tonight which will take me away from the House.

I wholly welcome the Bill, especially Part II which relates to higher education. The creation of a unitary system for higher education by cancelling the binary line is long overdue. Those who have experience of it know that it was thoroughly bad educationally and socially divisive. I believe that we should recall tonight that this development in higher education was introduced by the Labour Party. I feel sensitive about this matter because I was, unwittingly, a catalyst.

We had gone to Coventry to help create the University of Warwick. We began to relate to a marvellous polytechnic, the Lanchester Polytechnic which is now the Coventry Polytechnic. Eventually we came up with the proposal that the polytechnic should be merged into the university. It would become the Faculty of Technology and we would not proceed with our plans to create engineering laboratories. The principal of the polytechnic agreed and the polytechnic itself agreed. Coventry City Council agreed and Warwickshire County Council gave its blessing. Here was the opportunity for a new, bold educational development and, apparently, nothing stood in our way. But then the gnomes persuaded the Secretary of State for Education, Tony Crosland, to deliver his Woolwich speech creating the binary line. I see that the noble Baroness, Lady Blackstone, wishes to intervene.

Baroness Blackstone

My Lords, I am most grateful to the noble Lord for giving way. However, I must correct him on his history in the matter. There was already a binary line in existence: there was a binary line between the regional colleges of technology and the universities. The Labour Government of the time, with Tony Crosland as Secretary of State for Education, built up the regional colleges of technology into polytechnics and thereby created the great system of public sector higher education which has served us so well over the past 20 years.

Lord Butterworth

My Lords, I was concerned with the university sector before the Woolwich speech. It had many unitary characteristics. The forced and unnatural constraints which were introduced into the system by the cataclysm of that speech had to be experienced in order to realise how injurious they were.

At this late hour I do not wish to take up too much time of the House. However, much has been said about the powers being given to the Secretary of State to intervene in the responsibilities of the funding councils. I mention that because only a few years ago, in 1987, a committee was set up to review the operation of the University Grants Committee. It was chaired by the noble Lord, Lord Croham, and I was its vice-chairman. After a long review lasting several months the committee unanimously reaffirmed the arm's length principle. It reaffirmed the principle as being the cornerstone of university autonomy: that the national interest is best served in the long run by insulating the distribution of funds intended for universities from immediate political pressures. We have heard tonight how during the passage of the Education Reform Act attempts were made to introduce clauses which would in fact have breached that principle. However, they were successfully challenged and their political damage limited.

One might have thought that the settlement which was reached so recently would have been accepted as the basis for the funding councils to be established under the present Bill. I believe that we should ask why, once a settlement had been reached in Parliament, it now appears that that will not be applied when the new funding councils are established. It has been suggested that a compromise might be sought if the conditions which the Secretary of State can impose, and the directions which he can give, are so limited that they would not apply against an institution or a series of institutions. But that will not be enough. The principle goes much further. The Secretary of State should not be able to intervene in academic matters. In the long run, government will create better institutions by exercising restraint in this area. There is no other safe route for tackling these problems.

Leaving those problems aside, as the noble Lord, Lord Flowers, pointed out the Bill is concerned with machinery: it is setting up machinery. It is silent about the objectives to be achieved. Many of us consider that the most important function of a university is to advance, maintain and keep in repair our national intellectual inheritance. I should add that any institution which aims principally at being a finishing school for democrats will never be a university whether or not the word "university" is contained in its name.

As I said, the Bill is silent upon objectives. There is one important consequence which flows therefrom. The effectiveness of the legislation will depend more than is the case with most legislation on the manner in which it is implemented. After the experience of the Education Reform Act the Government must demonstrate complete good faith on the subject of university autonomy if confidence in this good Bill is to be maintained. The same applies to the funding councils. They can only fulfil their functions successfully if they have the confidence of the public, the universities and the Government. In the circumstances surrounding the development of the present funding council, that may well prove to be an uphill struggle.

7.49 p.m.

Lord Simon of Glaisdale

My Lords, I intervene only to share the anxieties which have been expressed about the mischievous potential of Clauses 64 and 77—a potential that would permit political interference in the affairs of the institutions of higher education. I do so the more readily because the noble Lord, Lord Belstead, in his distinguished opening speech, showed that the Government's mind was not closed on the matter.

Having heard all the impressive speeches, not least that of the noble Lord, Lord Butterworth, I cannot believe that the Government will not respond. Never more than today is the integrity and independence of universities important. The Government have done much to enlarge the economic liberties of individual citizens. They have done so by enlarging their scope to own property so that they can make decisions themselves as to how their means shall be laid out. They have done it by promoting the market economy so that the individual citizen, in laying out his money, can influence production towards his needs or wishes and thus the whole pattern of production.

All that, however, should not be exaggerated on either side. The Government still spend 40 per cent. of GNP as against a previous 43 per cent. Equally, in recent years there has been a notable resurgence of bureaucracy. That word has been much and valuably used today. One has only to think of the egregious Child Support Act of the previous Session, which contained almost every bureaucratic enormity that could be called to mind. Like the rest of your Lordships, I found the approach of the noble Baroness, Lady Seear, instructive: the desirability of interposing between the almighty state and the naked individual, intermediate institutions. The voluntary institutions immediately enlarge the individual's field of choice; but institutions such as the universities, with their independent outlook, can cushion the individual citizen from the pressures of the state. It is of the first importance that we adhere to the arm's length principle established for 150 years or more.

I have heard only two arguments in favour of the Bill's provisions. The first is that they have the same effect as the provisions of the 1988 Act. The second, which is rather difficult to reconcile with the first, is that it is necessary to make it clear that the Minister has a power of intervention in last resort. As to the first—whether there is any difference—if there is no difference, why is there a difference of terminology? Why was different terminology effected into the law of the 1988 Act?

As to the second—the last resort power of intervention of the Secretary of State—there is not a word in the Bill about it being a measure of last resort. We all know the many times that Ministers, perfectly well intentioned, have said how they will operate a measure. The time has come later when another Minister finds it expedient to operate differently. We have absolutely no need to question the good faith of present Ministers, but a time will come when there will be a generation of Ministers who did not know the present Ministers: Sir Humphrey will be succeeded by Sir Bernard. So it is necessary to ensure that if this is to be intervention as a last resort, that should be written into the statute. The Minister suggested that that would be difficult as a matter of drafting. That surprises me greatly. I cannot believe that the skilled draftsman of the present Bill would find it beyond his capacity to define the scope of the Minister's intervention. I am naturally chary of do-it-yourself instant drafting on the Floor of the House, but it immediately occurs to me that nothing would be easier than to limit the Minister's power of intervention to circumstances where he considered, on reasonable grounds, that there had been a misapplication of public funds.

I can think of another situation where he might wish to intervene. I need not deal with it now. It does not seem to me to be a cogent one, bearing in mind the undesirability of ministerial intervention in this sphere.

I wish to add only one thing under that head. If this is intervention as a matter of last resort, surely it cannot be right to subject the ministerial order to no more than negative resolution procedure. It is likely to be on financial grounds. In any case, it will be exceptional circumstances ex hypothesi which call for it. The affirmative resolution procedure should apply.

I hope that the Government will accept the sage advice of the noble Baroness, Lady Young, and themselves bring forward a suitable amendment to allay the justified concern that has been expressed so authoritatively today.

7.58 p.m.

Baroness Park of Monmouth

My Lords, I feel humble at having to follow a speech such as that of the noble and learned Lord, Lord Simon of Glaisdale. Perhaps I may begin by paying a warm tribute to the clear and cogent speech we heard from the noble Baroness, Lady Perry of Southwark. I hope that we shall hear many more from her.

I cannot but share some of the disquiet which parts of the Bill must arouse in universities, although I welcome the end of the binary line. Clauses 64(2), 66(1) and 77(2) are naturally particularly disquieting because they all represent further inroads into the autonomy of the universities. I find it difficult, if not impossible, to reconcile the Government's general policy, as I see it, of getting away from bureaucracy and delegating powers as much as possible at a practical level, of identifying and recognising excellence and of operating a cost-effective system with the three proposed clauses.

When in July this year the noble Lord, Lord Rochester, raised the possibility of a pay review body for higher educational staff, the answer he received from the DES included the statement: The system constrains management's freedom of action over pay matters and if extended to universities would greatly detract from the autonomy of these institutions". That is just what we fear the Bill will do; detract from the autonomy of the universities. As has been said earlier in this House, rather similar powers were sought in the Education Reform Act 1988. But the Government listened then and thought better of the proposal. I hope that they will listen again. I beg the noble Lord the Minister to urge the same wise second thoughts upon the Secretary of State this time.

I was for six years a member of the Hebdomadal Council of the University of Oxford. Incidentally, both undergraduates and graduates sat on that council. I therefore speak from knowledge of only one institution though I should like to record my satisfaction at what the Bill does for polytechnics, since I know and respect the work of the Oxford Polytechnic. From 1981 onwards the university conducted a series of rigorous exercises to review its size and shape. That was the natural outcome of the Franks Report and was influenced by the constraint on student numbers arising from natural pressure by the city, and by the fact that the quality of Oxford University as an institution would be diluted were it to become too large.

Oxford has clearly recognised that no great national institution can afford to become complacent or fail to develop to meet new challenges, and that it is right that questions should be asked and answered. Thus it has accepted that the UFC, when it was founded, also wanted answers to questions, forecasts of numbers and planning statements. However, the proper process of far-ranging and enlightened inquiry initiated by the university and well adapted to giving the necessary strategic answers, can only work if the autonomy of the university in its own well defined area of experience continues to be respected and indeed valued.

The Fellows at my Oxford college used to remind me that I was an administrator and not an academic. It is as an administrator that I am appalled at the potential waste that appears in the Bill. If the Government want a truly cost-effective and efficient system of further and higher education, they must begin to use, rather than attempt to duplicate, the skilled resources already in existence. They must not allow the system to fall into the hands of the enemy of most constructive thought and action—the bureaucratic process. I have a strong feeling that a DES virus has got into the Bill and that is why it differs so greatly from what the Secretary of State says. He stated recently, British universities are renowned for the excellence of their teaching and research, and for the quality of their staff. The central issue for the universities in the 1990s will be how to maintain quality while expanding rapidly and economically". Let the Secretary of State therefore trust the universities to give value for money and maintain quality. I submit that they are infinitely better placed to do so than the most dedicated officials—or perhaps I should say "commissioners"—and they have every interest in maintaining excellence, since it is their raison d'être.

Much money and that most costly item, time, has been spent on such things as research selectivity exercises. There have been two already, in 1985 and 1989, and another is projected for 1992. That is three exercises in seven years. The cost of the 1989 exercise nationwide was broadly estimated at £4 million. In Oxford, where the cost was over £100,000, on each occasion the overwhelming majority of academic units were rated at Grade 5; that is, excellent by international standards. We must surely resist the idea that many more such exercises could be initiated under the Bill in who knows what areas at the whim of a future Secretary of State. The more time spent on completing forms and returns, the less there is for the real work—both teaching and research. Is it really necessary for established scholars—in some cases, Nobel prize winners —to report in detail every few months how many publications they have produced?

On the question of quality assessment, Clause 66(1), no one could quarrel with the need to ensure that the universities have effective mechanisms in place for assessing quality. But it is essential that the assessment should be carried out by the experts on the ground rather than by visiting teams of quasi-HMIs. I hope that the Secretary of State will stand by his own view that the arrangements for accountability should be such that, there is no need for imposition from the centre", just as he has also said, It will continue to be for institutions to determine their own internal allocation of resources". I was much heartened to hear the Minister say that the Bill is to allow further devolved management and to give the institutions greater freedom to manage their own affairs. I hope that, if the Government will not heed us when we tell them that students have been left without the proper financial support that they need to be able to do their academic work, they will give the academic institutions which are to produce our graduates as much flexibility and autonomy as possible, with the minimum of intervention from outside and direction from above. Students, or, in the language of the market, "the consumers", want choices; the universities want the freedom to provide those choices.

What it all boils down to is that the universities are healthy plants and the ground has been well turned over. But let us have a Bill which does not provide yet more power for the plants to be pulled up to see how they are growing. I hope and believe that the Secretary of State will be too good a gardener to do that.

8.5 p.m.

Lord Walton of Detchant

My Lords, I too welcome many provisions of the Bill. But I would contend that it contains some provisions which have not been adequately thought through and one or two which are frankly misconceived.

The abolition of the binary line is timely. Many polytechnics have functioned for some years like universities, providing courses of a high academic standard and conferring degrees through CNAA which, especially in vocational subjects, stand comparison with those awarded by our established universities. I am glad that the increasingly powerful academic aspirations of the polytechnics will now be fulfilled Nevertheless, I cannot but express concern as to whether all the institutions which will in future be embraced by the Bill's provisions will be adequately funded to enable them to fulfil the academic teaching and research objectives they will wish to achieve and which the country must expect of them.

The fact that sixth form and further education colleges will come within the Bill's ambit will impose upon them new responsibilities for a wide range of activities, including the appointment of personnel, management of assets, provision of services, payroll systems, estates management, accountancy services, legal advice and building programmes which they have not previously been required to fulfil. As the National Association of Head Teachers points out, those new responsibilities will inevitably have resource implications. Transitional funding must therefore be made available to enable those colleges to fulfil their new responsibilities.

Perhaps I may also point out that training for 16 to 18 year-olds, should the Bill go through, will in future be provided in school sixth forms remaining under LEA control, in further education colleges controlled by funding councils, in grant-maintained schools and in city technology colleges. There is a potential recipe for conflict among the various providers unless careful strategic planning and detailed consultation take place among all those involved.

To return to the universities and the polytechnics, it is surely right that a polytechnic should be able to adopt, with Privy Council consent, the title of "university". But I hope, as does the noble Lord, Lord Denton, that many of them will choose titles highlighting their specialised strengths and skills. Rumour has it that some spirited discussions are arising in relation to the names of some of the new proposed universities, particularly those which exist cheek by jowl with long-established ones. But I am confident that the ancient British art of compromise and the wisdom of the Privy Council will resolve those matters without bloodshed.

I do not wish to stress again the points made by many noble Lords in the debate in relation to Clauses 64(2) and 77(2) of the Bill, which I believe to be quite unacceptable in their present form. This is 1991, not 1984. I cannot believe that these Big Brother clauses are justified. Obviously the Secretary of State will appoint to the new funding councils only the great and the good, who must be allowed to discharge their responsibilities in the interests of British people and of our education system without feeling that the Secretary of State is hovering above them with the sword of Damocles. If it is intended that he or she should have a power of last resort in accountability for public money, that must surely be subject to affirmative order rather than requiring a clause in the Bill. I firmly believe therefore, as many other noble Lords said, that Clause 77(2) should be deleted.

I am also somewhat concerned about Clause 66(1) relating to the establishment of quality assessment committees. I have a strong belief in internal and external audit and in performance review. Those provisions are being increasingly introduced into our higher education system, not least in my own profession. However, I do not believe these committees, as defined in the Bill, are necessarily the right way to handle this important function. It is vital that nothing is done through this legislation to undermine the charters and statutes of the universities which make them responsible for setting their own academic standards.

Clearly no action should be taken which might impair their ability to generate income from non-governmental sources. That income must remain under their total and unfettered control. I cannot but be anxious, too, about prospects for research, especially as £48 million of research infrastructure funding has now been transferred from the universities to the research councils. This may well have the appalling consequence that in medical research the charities and foundations which now provide more money than the Medical Research Council may be required by the universities to pay overheads on their research grants. I believe that will be inevitable unless the universities, both new and old, receive some funding for their research infrastructure under what remains of the dual support system.

Every higher education institution must have a viable research base. Although I greatly favour supporting centres of excellence, in a university one can never tell from which department the rising research stars will emerge. If core funding is to be spread too thinly across the higher education sector, our budding Nobel prize winners may never get off the ground.

Some other clauses are also questionable; namely, Clause 78(2), which relates to assessment by appointed persons, and Clause 79, which allows the funding councils to initiate studies designed to improve economy, efficiency and effectiveness. If accepted, these clauses, too, might seriously erode the cherished principle of academic freedom and flexibility of approach.

The Committee of Vice-Chancellors and Principals has expressed other concerns relating to the clarity of government instructions to funding councils; the adequacy of funds allocated nationally and to each institution; the importance of improving access for more students from more diverse backgrounds than hitherto to higher education institutions of all kinds; fairness of competition and, above all, stability of funding. That latter provision would allow universities and all higher education institutions to plan and manage their resources confidently and effectively.

My final point, at the risk of seeming parochial, relates to medical education. Such education in the United Kingdom is regulated, under the medical legislation of 1988, by the education committee of the General Medical Council. That body is responsible for defining the standards required in the qualifying examinations of the UK medical schools and for co-ordinating all stages of medical education. As the ultimate sanction it would have the power, if standards of education and examination were shown to be inadequate, to recommend to the Privy Council that the qualifying examinations of a medical school should no longer be registrable under the medical legislation.

The funding of medical education is exceptionally complex. Funds are allocated by the Universities Funding Council, via the universities, to our medical and dental schools. In addition, substantial resources are provided by the health departments, both in hospitals and in the community. Under a long established knock-for-knock agreement, the clinical services provided by academic staff who see and treat patients are compensated for by the teaching provided by consultants and junior medical staff employed in the hospitals of the NHS and by general practitioners who are being involved increasingly in teaching.

Advice to the former University Grants Committee and now to the Universities Funding Council on the provision of resources for medical and dental education has been largely the responsibility of a long established medical and dental committee. In this Bill I see no proposal relating to the establishment of a similar committee, nor do I see any requirement that the funding councils should have medical or dental members. That latter point written into the formal constitution of the present Universities Funding Council is of crucial importance, especially when such a high proportion of university spending is disbursed on these subjects.

It would plainly be a mistake to create under each of the three funding councils a medical and dental committee. I trust that medical and dental membership of those councils will be clearly spelt out and that the legislation will provide for the establishment of a medical committee for the entire United Kingdom. Such a committee should include representatives of the funding councils, medical and dental academics from England, Scotland, Wales and Northern Ireland and independent members as well as assessors from bodies such as the General Medical Council. General Dental Council, Medical Research Council and departments of health which have a crucial interest.

The committee would be required to advise upon the effects of changes in the National Health Service on medical and dental education and to review and co-ordinate the funding and delivery of medical and dental education in our universities. I urge the Minister to consider those points seriously in the hope that he will introduce amendments to correct the serious flaws in the Bill before it is further considered in Committee.

8.16 p.m.

Baroness Brigstocke

My Lords, education and training are interwoven. The more I listen to those concerned with technology training talk about training for the future, the more I hear them asking for trainees who are educated. They ask for trainees who can not only read so as to understand and write so as to be understood—that, of course, means they should be able to write grammatically and accurately—but who can also reflect and analyse. They ask for trainees who can think logically and who can ask questions and solve problems. Finally, they demand trainees who have the spirit and imagination to innovate, to explore and to create.

I give the warmest possible welcome to the Government's Further and Higher Education Bill which seeks to eliminate the thoroughly unnatural division between those two sectors of higher education —our fine universities and our fine polytechnics. This country has always encouraged individuals. We should allow both kinds of universities to flourish. I hope that we shall not waste time in drawing useless comparisons between universities and polytechnics. I respectfully point out to the noble Lord, Lord Beloff —I am sorry he is not present to hear this—that we in this country are still not fully Europeanised. The word "polytechnic" here has not yet achieved the distinction in the minds of parents and 18 year-old applicants for further education of the French term "école polytechnique".

William Johnson Cory said: Every school should make the most of that which is its characteristic". So let it be with our institutions of higher education. I prefer to call them institutions of learning and training Some higher education institutions will concentrate, properly, on academic subjects. Others will be more practically and vocationally based. Institutions will fulfil different needs according to their different characteristics.

This evening I wish to say a few words about polytechnics. Perhaps that is hardly necessary after the excellent maiden speech of the noble Baroness, Lady Perry. My view is based on my experience in the independent sector of secondary schools, albeit from one in an urban setting whose pupils come from a wider cross-section of the community—and indeed communities—than one might imagine.

St. Paul's Girls' School in Hammersmith sends almost 100 per cent. of its students to institutions of higher education annually. Out of the hundred or so girls in each year group, about three or four a year opt positively for polytechnics. Last year one of our students graduated from Oxford Polytechnic where she was able to combine librarianship and languages in her degree. Brighton Polytechnic is popular for its graphics and arts courses. Law, too, is often superbly taught in polytechnics.

Last week in your Lordships' House I mentioned the imaginative exchange programmes with Germany, carried out under the auspices of the Erasmus scheme, for engineering students at the polytechnic of the South Bank which enable graduates to obtain dual qualifications, having learnt the German language in both Britain and Germany. I noticed with interest a reference in The Times yesterday to a course being run at the City of London Polytechnic for, Female high flyers and tentative returners —a two-day full-time course on management development for women. I cannot but approve!

An important step towards removing the binary line between polytechnics and universities has already been taken. This year for the first time the girls and boys who are applying for higher education courses in 1992 are making their applications on a single form. No longer do they have to fill in an UCCA form for universities and a PCAS form for polytechnics. They can apply to up to five universities and five polytechnics on that same form. As a matter of course they are applying to both kinds of institution for related courses, such as law, media studies or film studies. They are identifying a specific course which accords with their own interests.

I understand that plans are afoot for a single application form for all institutions offering first degrees, diplomas and similar qualifications. That will bring in the colleges of education, and it should please the noble Lord, Lord Grimond, as it is a simplified form.

Another interesting development exemplifies the way universities and polytechnics are beginning to work together. It is by pursuing the possibility of movement between institutions. There is a new Sussex consortium called Southern Comfort—a consortium of Sussex University, Brighton Polytechnic and Surrey University—which is hoping to make it possible for students at any of the three institutions to take short courses in subjects not offered by their own institution.

Before I conclude I ought perhaps to make it clear that I do not hold shares in any polytechnic. My own experience has been with universities. I am proud to be newly on the governing body of Imperial College. But, universities do not have a monopoly of quality in higher education. The prejudices of the past are now out of date.

I share the reservations about certain aspects of the Bill so eloquently expressed by my noble friend Lady Young. In addition, I should like to ask the Government exactly how they will ensure that 16 to 19 year-olds, and older students, with special educational needs can be assured of their right to enter further education and have the appropriate support. Theirs is indeed a special educational need that must be safeguarded. Like the noble Baroness and the noble and learned Lord, Lord Simon of Glaisdale, I hope that my noble friend Lord Belstead will introduce any necessary amendments himself.

Overall, however, I warmly welcome the Bill and believe that it will go a long way towards enhancing the further and higher educational provision in this country and to demonstrate, if the noble Baroness, Lady Seear, will forgive me, the Government's understanding that good education is indeed an investment.

8.24 p.m.

Lord Hatch of Lusby

My Lords, in reading the Bill it seemed to me that the Government's thinking about the meaning of education is confused. As the noble Baroness who has just sat down said, although I do not agree with all her conclusions, education is intended basically to provide the means by which people can use their minds for problem solving and meeting the challenges of today and the future. It is not simply training for specific employment. As the noble Lord, Lord Beloff, so eloquently put it, one of the richest jewels in British history is the heritage of the reputation and achievements of British universities in that respect.

That is not simply a matter of philosophy. It is also a matter of practice today. How many of our young students will have to change their jobs five or six times during their working lives? They will therefore require the basic skills to solve problems and to meet challenges which do not apply simply to a particular job but which can also be applied to meet the challenges of new employment which they are bound to encounter.

Because the point has been made so many times, I simply associate myself with the criticism which has been expressed from all sides of the House of Clauses 64 and 77, in particular subsection (2) of Clause 77. As the noble Lord, Lord Flowers, said, the Government have broken the promise which they made to the universities in 1988 that they would not interfere with academic freedom. That subsection does interfere with academic freedom because it gives the power to the Secretary of State and future Secretaries of States to bring pressure to bear on specific institutions, including specific parts of those institutions and the work of those institutions. If the Government are given the power to interfere in that way in the academic life of our country the shell of academic freedom has been broken.

I wonder what some Secretaries of State would have done with those powers in the case of a department such as the Department of Peace Studies at the University of Bradford, of which I have been an honorary Fellow for many years. Yet that department has been training students in problem solving at a time when problem solving has never been as important as it is today. The Government have said that the power is a last resort. We all suspect the words "last resort". I associate my own university, the University of East Anglia, with everything that has been said—particularly by my noble friend Lady Blackstone, by the noble Baroness, Lady Seear, and by the noble Lord, Lord Flowers and others—about Clauses 77 and 64.

I want briefly both to echo what has been said and to introduce some new elements in respect of the question of adult education as it is affected by the Bill. Again, there is division in the Government's thinking between what they regard as academic education and what they regard as vocational education. There should be no division. Education should be geared both to academic understanding and learning and to the problem-solving that is essential in employment. The division made in the Bill between further and adult education is a totally false division between vocational and leisure education in the adult world.

Perhaps I may give one small instance. One of the warmest of my recollections goes back 30-odd years to a young woman student in an adult education extra-mural class just outside London. She was working as a clerk with very few skills. She attended that class for five or six years. She then wanted to go further. She had no understanding or backing from her family, but she secured an adult education scholarship to Cambridge. She went to Newnham, graduated, did a teacher training course, went out to teach in Tanzania for some years and then came back and taught here. Did she receive vocational education or leisure education in that adult education class? It was neither. It was education which gave her a better opportunity of employment, but which also enriched her life. Surely that is the object of education.

Clause 11 must be amended in Committee. The division between the functions and powers of the funding councils and the local education authorities leaves the adult education world in a complete fog. That situation has been brought to my attention by a number of organisations.

I want to ask the noble Lord, Lord Belstead— perhaps one of his colleagues will make a note for him in his absence—certain questions in order to clarify the situation as the Government see it before we reach the Committee stage. I realise that he cannot answer tonight all the questions that have been asked and I fully understand if he cannot answer my questions. Perhaps he will write to me before the Committee stage. First, is he prepared to alter the word "may" to "shall" in Clause 11? Is he prepared to make it a statutory duty for local education authorities to fund adult education of, as in the words of the Bill, a "leisure-time" character rather than simply give permission?

Secondly, as has been said, a number of adult education organisations are anxious about the effects of the Bill on them. The noble Baroness, Lady Seear, mentioned Morley College. Ruskin and Richmond colleges have also been mentioned. Perhaps I may also add Fircroft College. My particular worry is an organisation in my city of Norwich, Wensum Lodge, which does not know where it will be left as a result of the Bill. There will be a splitting into two parts, between adult examination classes and adult basic education activities, of the management and finance of the LEA or, in the case of further education colleges, of a funding council. The further education colleges can contract with the LEA to provide examination and ABE services for them, but they do not have to. There is no guarantee that that will happen: the colleges just do not know where they are. They are now independent of the LEA and, for that matter, of each other. Some may wish to contract and some may wish not to.

If the LEA is left to operate a separate, non-vocational adult education service, we do not know how far government funding will enable it to go. There is therefore a fear that independent, non-vocational adult education looks likely to have to increase student fees substantially or cut its provision. I should like the noble Lord to make the position clear.

Secondly, there is the question of the voluntary organisations, such as the WEA and the women's rural institutes, both of which have made representations to me. Perhaps the noble Lord will answer these questions on behalf of the voluntary sector. What place will the voluntary sector occupy in the proposed legislation? What will be the relationship between the proposed funding council and the voluntary sector? What should be the relationship between local education authorities and the voluntary sector?

The WEA has been told by the Secretary of State that it can rely on funds from the revenue support grant. But that grant is not necessarily used for specific purposes. There is no guarantee that it will be used to fund adult education. Will the Minister assure us that those voluntary organisations will be funded to continue and, we hope, to expand their activities in adult education? The noble Lord, Lord Belstead, mentioned the WEA in his opening speech, but he did not make it clear where the Government stand as regards the funding of those voluntary organisations in respect of their continued service in adult education.

The noble Lord also mentioned the inclusion of youth services. I can find no reference in the Bill to youth services. Should they not be included along with the provision of adult education? Should they not be included as one of the duties of local education authorities? I ask those questions in order to elicit information which will be valuable to Members on all sides of the House before we reach the Committee stage.

8.37 p.m.

Lord Soulsby of Swaffham Prior

My Lords, we should welcome many aspects of the Bill because it provides increased opportunities in further and higher education for both our young people and the older part of our population. As many speakers have said today, it does away with the binary line. As someone who has spent several years overseas in other universities, I have never been able to understand what it was all about in any case. It will bring higher education in the United Kingdom much more into line with the philosophies and practicalities of the situation elsewhere, certainly in the Western world.

Fears have been expressed about undue interference on the Government's part in universities, especially with respect to Clauses 64 and 77, in that they provide a window of political opportunity for interference. I have no need to recite again the anxieties that have been expressed in the House. That fear is real, but I am relieved that my noble friend the Minister is well aware of those anxieties and has indicated that he may be willing to consider amendments. I certainly hope that that will be the case.

With respect to those clauses, there is an obverse to the point made about interference; namely, that there should be some safeguards so that the appropriate funding council may make inquiries where there appears to have been an unwarranted malevolence towards a certain discipline in a given university.

I also welcome Clause 78 in Part III of the Bill, which authorises two or more funding councils to exercise jointly any of their functions. That is particularly relevant to the concept of academic audit (should it come about), which I believe it would be not only unwise but divisive to conduct on a regional rather than a UK basis.

Secondly, still staying in the ambit of this clause, comes the question of the smaller disciplines or those disciplines in which there are other authorities that decide and guide their curricula. Here I believe that there must be an overarching, co-ordinating type of body which will look after certain disciplines. The noble Lord, Lord Walton, referred to the medical and dental areas as an example and perhaps I may be permitted to declare my interest. In veterinary medicine there are only six veterinary schools, two in Scot and and four in England, and it would seem unwise to have those dealt with by separate authorities. So combining the exercise of joint advice and funding would be appropriate here.

The Minister stated that the aim of this Bill—or rather these Bills—was to produce higher quality higher education. I do not believe that anyone would wish to quarrel with that statement. Its corollary, as stated in Clause 61 is high quality research. That will scotch the concept of "teaching only" universities. I for one cannot envisage a university by name without any research being associated with it.

We are all aware that building a high quality research programme, be it in the sciences, the humanities or any other discipline, is a long-term process. We are also painfully aware that the collapse or destruction of a research programme can be a very short process and can take place over a period of weeks. If we are to sustain higher quality in higher education, we need long-term assurances of resources to sustain quality research. We must retain the outstanding young scholars who have gone through our universities and make sure that they return to this country when they have done post-doctoral work overseas.

With respect to the latter point, there is indeed an organisation of some 2,000 members called British Scientists Abroad. The majority have tenured posts in universities overseas. They have experienced and shared the disappointment of under-resourcing, which led them in the first place to go overseas. Many of those individuals have expressed a desire to return to this country should the promise of higher quality higher education be fulfilled. Let us hope that this Bill, which has much to offer, will indeed provide the basis for new health and vigour in our higher education.

8.43 p.m.

Lord Broadbridge

My Lords, while I broadly welcome this Bill, there are several areas of proposed involvement by the Secretary of State which give me cause for concern, a concern which I know is shared by the United Kingdom Committee of Vice-Chancellors and Principals of Universities and, judging from her opening remarks several hours ago, also by the noble Baroness, Lady Seear.

In Part II, Clause 64(2) provides the Secretary of State with a power to intervene in specified institutions. The wording is: The terms and conditions subject to which grants are made by the Secretary of State to either of the councils … may in particular impose requirements to be complied with in respect of each institution". Such a power was proposed in the 1988 Education Reform Bill but was modified during the passage of that Bill when fears were expressed that it could be used for political purposes in the future. Now it has surfaced again and one wonders why.

I am concerned, first, because the power is unnecessary. The HEFCs will monitor their recipients' expenditure, as also do the Public Accounts Committee and the National Audit Office. At a time when everywhere else this Government is deregulating everyone, surely it is ridiculous and unnecessary to institute such a power. To do so would implement the well known Latin tag Quis custodiet custodies? in the sense of who is inspecting the inspectors. The three levels of inspection that I have mentioned are surely enough. They should, together with the recipient of government money, be given full responsibility for faithful custody of those funds and that is enough.

There are already far too many people in this country monitoring the effects of everything from opinion polls downwards. We are becoming a nation of nosey parkers. Let no one be in any doubt that extra surveillance will have to he paid for. The Secretary of State will not personally, out of his own salary, conduct the intervention work prescribed in this Bill but rather it will be done by a small army of civil servants.

Secondly, such intervention is insulting both to the academic institutions involved and to the existing monitors which I named. I exhort Her Majesty's Government to delete that section of the Bill. The Secretary of State's powers should, under the new legislation, be no greater than under existing law.

Similarly, after a reenactment of existing law in the preceding Clause 77(1), Clause 77(2) goes further and states that directions made in an order by the Secretary of State may be special, as opposed to general, and may, in particular, relate to the provision of financial support … in respect of activities carried on by any particular institution or institutions". I have been told by the Committee of Vice-Chancellors and Principals that the Parliamentary Under-Secretary of State has recently written that, the Government attaches very great importance to academic freedom and the power is envisaged only as a power of last resort. I think, I believe very justifiably, that as drafted the clause provides the Secretary of State with wide powers to intervene in an individual institution and could go well beyond his or her powers of legitimate concern to safeguard public funds. It is not that I particularly distrust the present holder of the office, but if the holders of that appointment were at some time in the future to change as frequently, for example, as those for trade and industry have done in the past decade, heaven knows who might be in charge. Once written into legislation the power is there, probably for years to come. I believe that that power should be redrafted to confine it to a power of last resort to provide only for proper accountability for public money and then only subject to affirmative resolution.

Clause 66(1) places a responsibility on the funding councils to ensure that there is provision in institutions for the assessment of quality of education; and provides that a "Quality Assessment Committee" is established in each council.

Once again, with the second of these provisions we are in the business of being a nation of busybodies. A university or polytechnic (shortly to become a university) stands or falls by its maintenance of academic standards. By statute or Royal Charter it is held to be so responsible. We do not need a kind of academic quango set up to do that. Surely it is significant that Oxford, our oldest university, this year abandoned the publication of a league table named after its founder, Norrington, a former president of Trinity. How are the councils to assess some of the world's greatest academic institutions with quality assessment committees? Just as arguably we might have one for the Houses of Parliament. I am sure that no noble Lord will wish to be told that he may not speak more than twice in 1992 because the quality assessment committee has decided that he is boring.

In conclusion I turn to Clause 78(2). The clause provides for any two or more funding councils, if directed to do so by the Secretary of State, to institute an assessment by an appointed person, of matters relating to the arrangements made by each institution in Great Britain which is within the higher education sector for maintaining … standards in the institution". That is surely nothing less than a reserve power exercisable at will by the Secretary of State to impose an academic audit on an institution. It is unnecessary and, for the same reasons that I argued earlier, it should be removed.

Academic institutions have every reason to perform well. They are in a highly competitive environment. Never have potential students taken greater care to investigate the quality of what is being offered by each institution before making a decision than at present. My daughter who is studying textile design visited no less than 14 institutions in England, Scotland and Wales last year before making a preference list.

Academic institutions are a self-fulfilling prophecy. Poor standards lead to no students. Nonetheless, I believe that the institutions should be monitored. But provision is already there in the form of the councils, the Public Accounts Committee and the National Audit Office. I believe that the Secretary of State should repose confidence in those bodies and should not become involved in the ways to which I have referred, as would be the case if the Bill as now drafted were passed into law. In short, he should not have a dog—several dogs in fact—and bark himself. I look forward to any comments that the Minister may be kind enough to make in reply to my expressions of anxiety.

8.52 p.m.

Baroness Eccles of Moulton

My Lords, I too should like to add my congratulations to the many already extended to my noble friend Lady Perry on her excellent maiden speech. She speaks from depths of experience and it is reassuring to hear such confidence expressed in the future of higher education. I should also like to say how delighted I am to hear the announcement made by the Minister that Sir Ron Dearing is chairman designate of the new higher education funding council for England.

The removal of the binary line between universities and polytechnics coupled with a rapid expansion in the number of students entering higher education will have as profound an effect on the sector as any proposal we have known since the war, including the implementation of the Robbins Report in the 1960s. It is implicit in the Bill that throughout these changes the quality of academic qualifications is maintained.

What is meant by academic qualifications? A number of definitions have been given in the debate but a further simple answer can be given in two parts. First, it can be a qualification that has been won through a pursuit of knowledge for its own sake, a furnishing and training of the mind which equips the graduate for further intellectual development in the fields of his choice. Secondly, it can be a qualification with a high vocational content which may or may not be taken straight into the marketplace on graduation. Few academic qualifications of any kind are gained solely by years spent in library or laboratory. The quality of face-to-face teaching, whether in large lecture hall or small tutorial, is vital.

We need therefore to consider the academics themselves, from the most eminent professors to junior lecturers at the start of their careers. What do they need in order to sustain standards of excellence in their teaching? Clearly they need to be properly equipped. But what about research? The answer can range from a belief that all academics must have some component of research incorporated into their work to a view that a teaching-only contract is not incompatible with achieving standards of excellence. It would appear that the system is not designed to make t possible in future for every academic in every university, old and new, to undertake research. If that is so, it will have been accepted that research is not an essential component in every case for quality to be maintained.

Under the new methods of funding, the higher education funding councils will selectively allocate a diminishing amount of funds, the balance being transferred to the research councils, which as a consequence will have an expanding amount with which to respond to bids. It is reassuring to know that once the higher education funding councils have distributed research funds based on each academic department's ability, the institution itself will decide how the funds should be allocated and this does not have to reflect exactly the funding council's assessment.

It is highly important that those funds are productively allocated. The quality audit unit developed by the institutions themselves, and the funding council's quality assessment units, will help to confirm that the right decisions have been made and will give an indication of where there is room for improvement. However, there is a risk that the resources will tend to concentrate in the powerful institutions, which could lead to ossification, and worse.

If there is little or no experimentation and risk taking on the part of the funders, the smaller, aspiring, lightly-funded institutions will find it hard to break out of the deadlock. It could have an unbalancing effect geographically, with activity being concentrated in Oxford, Cambridge and the big civic universities. It could also cause large industrial concerns to base their research centres in a few high profile institutions. There are indications that that is already happening. For instance, Nissan, whose major factory is in Sunderland, has established its research centre in Cranfield.

But over and above all other considerations, it is essential that a close eye is kept on both the unit of resource and capital investment. If either is allowed to slip too far there will be an inevitable decline in standards.

To end on a cheerful note, I should like to tell noble Lords about two institutions in the North East which are already criss-crossing the binary line, carrying out a plan which was conceived before the removal of the binary line was so much as a twinkle in the Minister's eye. Durham University, with which I have been closely associated for over 10 years, and the Teesside Polytechnic are founding the joint university college on Teesside. This was the largest conurbation without a university presence. The college is being built under the auspices of the Teesside Development Corporation. It is a fine example of interdepartmental co-operation and students are already enrolling for the next academic year.

8.58 p.m.

Lord Crook

My Lords, I speak today as a customer for what has been weirdly described in Clause 11 of the Bill as organised leisure time occupation—in other words, adult education classes. They consist generally of part-time day or evening classes essentially for adults. Their objective is to be a civilising influence on the community. Such classes are not primarily aimed at any economic objective. I am pleased to note that the Government acknowledge that such activities take place and play a part in the life of the community. They are indeed most important.

Frequently those classes bring out the unexpected talents that many of us find we possess when put to the test. Languages and the arts are much in evidence on those courses. They are skills perhaps not given to too many in this country. The thought of more "Brits" being able to speak French is encouraging. Our knowledge of the arts generally is lamentable by comparison with that in most parts of Europe.

On the other hand, these courses can teach manual skills. Motor mechanics for women sounds a rather useful attribute. Physical training helps people to keep fit. The courses have as much to do with social coherence as anything else. Many of the classes to which I have referred provide not only formal instruction but a means whereby people can get to know each other. In many parts of the country that can be difficult, in particular for people of advanced years. Classes in the arts provide a focus for the exchange of ideas and in various ways enhance students' skills and abilities. Therefore, I am pleased to note that, despite the gloomy forecast in the original White Paper, Clause 11 of the Bill provides a role in these matters for local authorities.

However, I am not totally encouraged by past experience. It has shown that when money is tight one of the first budgets that a local authority will try to cut is that for adult education. Frequently in the past that has been less than the standard spending assessment. Money has been diverted from adult education into other causes. Given the diminishing role of the local education authorities in education, that risk may become even worse.

The Bill contains nothing to prevent local education authorities form sub-contracting many of their duties to some of the local colleges. That could be beneficial in making good use of facilities which were not otherwise utilised. However, that must not be encouraged to the extent that it undermines the essential local character of adult education in many parts of the country. It is largely a question of classes being run in local schools and village halls where courses to suit the local needs can be provided by the local authority. Certainly a distant funding body can have no idea of the subtleties needed and the resources available to run such courses. I hope that the Government will be able to secure more robust support for further education interests.

Adult education might well be allowed to wither on the vine if it is left to uninterested local education authorities. There will be less demand, less quality, followed by even less demand until it dies. I hope that the Government will take a more robust attitude towards the provision of such courses. That will be widely welcomed by the public. Furthermore, I hope that the Government will ensure that money that is supposed to be spent on adult education is so spent.

I hope to be present to hear the winding up speeches. However, if the debate carries on too late I must ask your Lordships' indulgence in allowing me to catch the last train out of Charing Cross.

9.4 p.m.

The Earl of Stockton

My Lords, it is proper that I should first declare an interest. After all, my family publishing business has been involved in producing school and academic works for more than 140 years. However, I almost hesitate to do so as a number of your Lordships have been published by my firm and they may have discovered that this is not the most lucrative or remunerative business for either author or publisher.

I thank the noble Baroness, Lady Eccles, for the plug that she gave to Durham and Teesside. I agree entirely with her views on the subject.

Beyond that I am also involved with education in a number of other ways. I am a governor of two schools in the London area and one in Middlesbrough. I also have the honour to sit on the London Together working party under the chairmanship of Professor John Ashworth. In my capacity as chairman of the Central London Training and Enterprise Council I have close connections with further education colleges, polytechnics and the education authorities in the London boroughs of Camden, Hammersmith, Kensington and Westminster. Finally, I have three children in full-time education, the eldest having recently taken his GCSE examinations—with considerable success, I am happy to inform your Lordships.

I welcome the broad thrust of the Bill before your Lordships' House, continuing as it does the trend towards the deregulation of education. Although it has to be said that some of the provisions—for example, in Clauses 64, 66, 78 and 79—introduce constraints which smack to me of bureaucratic or ministerial wish to retain powers of interference that are at odds with the stated aims of the legislation.

I was encouraged to hear from my noble friend Lord Belstead that he has reservations about Clause 77(2). In my view it is unnecessary because the Secretary of State has plenty of powers without adding to them with these provisions. I also have anxieties that the central and regional funding councils will be over-cumbersome and that their funding may be top-sliced from local education authorities. I am aware that proper care and control of public expenditure must be exercised. However, the number of people involved and the complication of procedures is redolent of bureaucratic empire building. I should like the Minister to assure the House that the total number of staff in the department at the end of the process will be less than at the beginning. Similarly, I hope that there will be no increase in the number of consultants, advisers and other mythical beasts.

There are detailed matters in both parts of the Bill that will require out attention and improvement in Committee. I refer in particular to those relating to the relationship between secondary education and further and higher education and the role to be played by the training and enterprise councils, which I am surprised to see are not mentioned in the Bill, although I suppose that stemming as they do from an initiative of the Department of Employment I should not find that so surprising. The essential requirement is that flexibility is built into the legislation, for the relationships must be dictated by local requirements and provision. Similarly how sixth form colleges are to operate locally must take into account whether there are secondary schools in the area with sixth forms and what provision for sensible planning is already in place that will also include the voluntary sector.

I hope that the Minister can explain to your Lordships why the local education authority retains a duty to secure 16-plus education when the funding for it is to be transferred to the fund councils? If there is to be a split, it should be a clear one, instead of leaving residual duties and powers to the local education authorities, and indeed to the schools. If the Minister is unable to articulate more clearly who is responsible for what, I fear I must table amendments at a later stage to introduce the necessary clarity of objective and purpose.

I approach this Bill with enthusiasm, which may give the Minister a sinking feeling, but also with an absolute conviction that the creation of a genuinely seamless post-16 education system is the most important legislative proposal to come before your Lordships in this Session, or indeed in many others.

A seamless system is premised on the necessity to create an expansion of 16-plus provision that will enable the citizens of the United Kingdom to pursue further and higher academic and vocational education and professional education and development in a flexible manner throughout their lives. There should be no impediment for a young person who leaves school at 16 and gets a job on a building site as an electrician's mate from progressing via training schemes with appropriate national vocational qualifications, through an FE college, further work experience, a BTec diploma or similar recognised qualification to a polytechnic or university and coming out with a master's degree in electrical engineering, without a single A-level and without at any point having attended a higher education institution on a full-time basis.

We have in Britain a fine tradition of such routes, going back to night schools and the mechanics institutes and more recently such pioneering organisations as Birkbeck College, London—I am pleased to see the noble Baroness the Master in her place—and especially the Open University, which has taken the tradition of offering a second chance for higher education to those who may have missed it the first time around and has extended it to anyone irrespective of their academic qualifications.

However, those paths to a degree or other qualification are extremely demanding both on the time and initiative of the student compared to those taking, the more conventional full-time undergraduate route. The most important part of a truly seamless system is that proper accreditation be given for all forms of training, education and even personal and professional development to allow the maximum scope for individual progression through the credit accumulation and transfer scheme to properly validated qualifications.

The post-16 record for most of this century is not one of which this country can be proud. Consistently the value of technical and vocational further education has been sacrificed for the twin pressures of a cheap low-grade workforce at one end of the spectrum and the middle-class classical academic tradition at the other. Unlike France, Germany and Japan or even the United States, qualifications in the domains of technical and scientific further and higher education have consistently been regarded as less significant in our society than the greats, history, English, politics, economics or, Heaven help us, sociology and media studies.

I shall not bore your Lordships with the statistics of stay-on rates, technical training schemes, qualifications in engineering, the size of the applied scientific pool or the relative social weighting given to the ingeniere in Italy or Herr Doktor Doktor in Germany. It is a sad catalogue of which your Lordships are only too a ware, for the position has emerged in debates in this House and in another place four or five times in the short time that I have been in Parliament.

Let us trust that we can now put an end to the orgy of navel gazing that has dogged this issue over the years, for in this Bill we have the opportunity to put in place the mechanisms to change once and for all the melancholy state of affairs that has, I believe been one of the root causes of the country's economic decline. The Government are to be congratulated on having tackled the issue. It is up to us to make sure that a cow rehensive and imaginative Bill comes on to the stature book.

9.13 p.m.

Lord Desai

My Lords, I begin by congratulating the noble Baroness, Lady Perry, on her maiden speech. She brings to the House extensive experience of education in the polytechnics sphere and I look forward to many more speeches from her.

I too declare an interest. Throughout the 26 years which I have spent in this country, I have been engaged as a teacher in higher education. I cannot do anything else; I am stuck with it. Let me say also that when I first arrived the university sector in this country was not only an outstandingly good place to work and proud of its achievements; it was too a highly productive and efficient sector, as the noble Lord, Lord Beloff, emphasised.

In the early 1980s, when the noble Lord, Lord Joseph, was Secretary of State for Education, he commissioned a study from Professor Robin Marris of Birkbeck College about the cost effectiveness of university education. Although Professor Marris did not start out necessarily believing that universities were very efficient, being an honest, good, applied economist he discovered that the rate of return from university education in the United Kingdom was twice as good as the rate of return from manufacturing in the United Kingdom. One can quarrel about numbers, but no matter how he tried to test the figures he found that British university education was one of the most efficient in the world. We ought to recognise that and be proud of it.

However, over the latter half of my career in this country the university sector felt beleaguered. We have had to cut corners and think about money all the time. I have twice as many tutees as I had when I first arrived, 34 instead of 15, and some of my time is spent thinking of which private source of funds I can exploit in the future. That is not the way one should fund education. Economists have recently come back to examining the reasons for the different growth performance of different countries. Professor Robert Lucas of Chicago University, a leading conservative economist, has discovered that education and investment in education explains the splendid growth performance that is found in South Korea and other countries.

While I welcome the end of the binary divide, like the noble Lord, Lord Beloff, and some other noble Lords, I fear that we are being levelled down and not up. It is not that polytechnics will become universities, but that we shall all become polytechnics. The rumours are already around that the higher education funding councils, which I welcome, will ultimately lower the unit of resource for teaching, and the margin that has been allowed under dual funding for universities—a good practice, if I may say so—will be hived off and will be made part of another arrangement.

Given what we know about the Treasury over the last 100 years or so, it is unlikely that any such rearrangement would increase the amount of resources available; if anything, resources would be decreased. Of course we shall compete, because competition is the nature of the game. Since it is a game we shall adapt ourselves, but I should much rather be doing what I am good at—research and teaching—rather than running after money. If I have to run after money, I shall; but it is not the best use of my time or that of my colleagues.

I welcome the end of the binary divide. However, we may be entering an era of further and continuing under-investment in education. I know that numbers will be cited to show that spending on education has increased in real terms and so on, but any examination of universities and polytechnics will reveal the neglect of capital investment, the tremendous crowding in of students, and the things that we have to do. Clearly we are not providing the sort of product that we used to be able to provide.

The product that the universities provide in terms of throughput and the small amount of wastage is an efficient one. I fear that what we shall see more and more is an increasing degree of wastage. Ours and the Continental system will probably converge, with many more students but few actually graduating. I hope that although the machinery has been set up for combined funding arrangements for polytechnics and universities, some thought will be given on a longer term basis than so far to what the nation wants from university education.

I believe that a case can be made for investing more in higher education rather than less. I do not want to detract from the importance of the 16 to 19, or any other, form of education. However, I believe that in terms of salaries, capital investment and unit resources, the higher education sector, although it has adapted and innovated, has had a beating in the last 10 years which it could have done without.

I turn to some specifics. I would like the new HEFCs to resume the splendid practice that the University Grants Committee used to have of quinquennial funding. We have not had any certainty in funding from one year to the next in the university sector for some time now. It would be an immense help if we could be given a projection of what the universities and now the polytechnics can expect as regards funding. What we have been subjected to is not autonomy but detailed quantitative controls such as how many students we can take and how many are home or EC-based students. There have been all kinds of quotas and constraints while we still believe that we are autonomous and have academic freedom. I hope that the Government will re-think Clauses 64 and 77.

The time has come for a new social contract with the higher education sector which will give us some idea of what funds we can expect. We should be allowed to get on with the task of recruiting students. We can do that as long as we are left alone to do so within a reasonable framework of finance both on the capital and the current sides. That is my hope. Perhaps the next election will make conditions more favourable. If not, we should have a tripartite agreement that education is investment and that we should have more of it.

I am surprised to see that the rules on representation on governing bodies are somewhat changed. I have tried to read the clause, which is rather arcane. I am subject to correction, but I note that employees of polytechnics, local government officials and students can no longer be members of the governing bodies; they can only be co-opted. There is absolutely no reason for that change. We should have more representation from local authority officials and employees, both academic and non-academic staff, as well as students. We would gain from their advice; there is no need to fear it. I believe that co-option is a cop-out. We should have full and proper membership for these people. I wish to hear the reason why that change has been put through.

I turn to the quality assessment unit. I fear the worst because under the name of quality what will be measured is what is called cost effectiveness. We shall go for statistics such as cost per student taught rather than cost per student who has graduated, or any real quality correction. Without being too insular, it is true that in order to judge the quality of higher education one has to consult the people who produce it. It is more true in this case than in many others. I do not see adequate provision in the current Bill for that kind of role for university and polytechnic teachers who alone can set standards by the peer group review.

I fear that if we aim for a simple yardstick of money spent against the equivalent number of full-time students, we shall further impoverish the education system and lose one advantage that we have at that end of the education scale relative to our EC partners. While I welcome the end of the binary divide I wish that the polytechnics had been told that not only can they call themselves universities but that they can also have funding. I wish that they had been told that they too can have contracts for their staff as the universities have had for a number of years. After all, I believe that the universities claim rightly that they make good use of the money. If that is so, then what is to prevent the polytechnic lecturers from doing so? They do as much research as anybody else but under more difficult circumstances. Let us reward them and give them more money for research. It is in the long-term interest of the nation, apart from being a pleasure in itself, that we should have more university education.

9.25 p.m.

Lord Pearson of Rannoch

My Lords, I should start by declaring an interest in that I have served for eight years on the Council for National Academic Awards, the closure of which is envisaged by the Bill. However, I should emphasise that I am not an academic and did not have the benefit of higher education myself. I am one of the obligatory representatives of commerce and industry on the council.

The Government's intention to remove the binary line is proof of their confidence that the CNAA has done its job well over the past 27 years. All the polytechnics and some of the larger colleges are now judged to be sufficiently mature to validate their own courses, and are soon to be able to award their own degrees. They are therefore to have parity of esteem with the universities, and even in the face of its own resultant closure, the CNAA welcomes this. It is the mark of the CNAA's success.

Having thus stated the CNAA's honourable position, I feel I should now speak personally, from the lonely vantage point of one who has spent a good deal of time in what used to be called the public sector of higher education, but who has never been part of that system. For what it is worth, I believe that much of what I have to say is shared by colleagues at the CNAA, but I would not want your Lordships to think that I have taken their brief lest any of my more controversial views—controversial, that is, in the world of academe—should be held against them and thus make their life even more difficult than it is at the moment.

I welcome and support this Bill, but three areas worry me, and one of them worries me very much indeed. I start by dealing with the smaller worries, the first of which has nothing to do with the CNAA and its related fields. I wonder whether I may join the noble Baroness, Lady David, in drawing the attention of my noble friend the Minister to Clause 4(2) of the Bill, which provides that the new further education funding councils may secure appropriate provision outside their own institutions for people, over compulsory school age, with learning difficulties if the councils are satisfied that adequate facilities are not available in the institutions under their auspices. It is of course the word "may" which worries me. Perhaps my noble friend would be good enough to look at this word again to see whether the Government could replace the word "may" with the word "shall".

I must declare another interest here in that I make that request as the father of a handicapped child. I should also tell your Lordships that the point was made to me by my noble friend Lord Campbell of Alloway, who very much regrets that he is unable to be present this evening to speak to it but who may wish to raise it in Committee. I understand that very few young people would be assisted by the duty which we are suggesting, so I hope that the Government can look favourably on our request.

I come now to the next of my worries about this Bill, for which I cannot believe a satisfactory solution will not be found. Other noble Lords, particularly the noble Baroness, Lady McFarlane, and my noble friend Lady Cox—both of whom have wide CNAA experience—have spoken with considerable expertise on this point so I shall not rehearse all the arguments again. I shall merely refer to the problem faced by the 40,000 students in our 70 non-accredited institutions who do not know what sort of degree they will get because they do not know with whom their institution will be able to link up for validation and degree awarding purposes. We cannot expect these students just to lump whatever comes their way. They have signed lap for a CNAA degree, and they must get a CNAA degree if they want one.

The more difficult part of this problem, as other noble Lords have said, concerns some of the non-accredited institutions themselves which will not find it possible to make alternative validating and degree awarding arrangements in the timescale which now appears to be envisaged by the Bill. I join my noble friend Lady Cox and refer particularly to our theological colleges whose current CNAA degree is much respected worldwide. From the academic viewpoint, they will not find it easy to join any university or polytechnic that I know of because the academic boards of those institutions do not share the genuinely Christian ethos of our courses. In fact, most of those bodies are, on balance, rather aggressively secular.

Nor will they find it easy to strike a fair bargain financially. What have they got to offer? We must bear in mind that they are competing for students in the same market place as their intended partner. It is also worth recording that the CNAA's validation fee is£50, whereas I understand that the universities charge up to seven times as much as that, at £350. Who will make up the difference?

I am not suggesting that a rump of the CNAA should he kept going to deal with these problems. That solution may not really be practicable in any case, given the numbers of staff who are of course already leaving us because of our impending closure. However, I do suggest that the CNAA's charter should be kept in existence at least until the last students who have signed up for one of our courses have received the degree to which they are entitled. There is no reason why another institution should not administer our charter to that end. I trust that the Government will be able to consider that concept.

I come now to my biggest worry about the Bill, which is whether it will leave enough quality assurance and control in our whole system of higher education in future. My personal view is that the polytechnics are not yet ready for the full academic independence which is now proposed. I say that because only in the past two years has the CNAA granted what we call "accreditation" to all the polytechnics and some of the larger colleges. The idea was that an accredited institution would validate its own courses and largely select its own external examiners, subject to a periodic check-up from the CNAA every five years or so.

The CNAA has not had time to carry out a single re-accreditation visit. I must tell your Lordships that we took much on trust when we granted accreditation in the first place. The recent saga of the very unsatisfactory courses in independent studies at the Polytechnic of East London proves that our trust has not been entirely vindicated. Of course, that cannot be an isolated example. I also wonder whether our cultural studies courses, for example, and most of our media studies courses, are as broad in their academic scope as your Lordships would expect a degree course to be.

I appreciate that by saying that I will be irritating the whole polytechnic sector, which is bad enough. But I am afraid that I would be failing in my duty to your Lordships' House if I did not go further and say that quality assurance in the polytechnic sector is clearly more rigorous than it is in the university sector. No doubt I have now also alienated all the vice-chancellors in your Lordships' House and elsewhere who make up a famously formidable lobby. Therefore, perhaps I may be allowed to give your Lordships two examples of how quality assurance under the CNAA is more rigorous than it is in the university sector.

First, the detail of every course which leads to a CNAA degree has to be published in the form of what we call a "definitive course document". That is available for students to see before they embark on the course in question and it is lodged in the library at the CNAA where any interested party may inspect it. It contains a week-by-week description of the course and it must include the reading list.

Secondly, the CNAA maintains a register of approved external examiners for all our courses which is open to inspection. During the accreditation process we laid down a system which, if followed by our institutions, will ensure that cosiness in the appointment of external examiners is kept to a minimum. Each of our courses must have two external examiners so appointed.

Before any noble vice-chancellor rises to his feet and berates me for the ignorant insurance broker that I am and tells me that such safeguards are not necessary in our splendid universities, I ask him to think again. Can any vice-chancellor in the land put his hand on his heart and say that there are no courses in his university which would benefit from these sorts of safeguards? Or are there just a few which are not really worth the trouble of tackling? Or are there lots? As things stand at the moment, we may never know. But I am sure that there are more than there ought to be and it is our students and our future which suffer from them. Therefore, I suggest that the proposed new quality audit unit should insist on a public "definitive course document" for all higher education courses which are funded by the taxpayer and that the external examiners for each course should also be made public.

May I also put in a plea, as someone who has spent literally hundreds of hours over the past eight years as the only non-academic at meetings of academics and education experts from the Department of Education and elsewhere—I suspect that is a unique experience—that at least a quarter of the membership of the new quality audit unit should consist of people who are not academics, and who are in fact appointed by the Secretary of State?

May I suggest too, very strongly, that similar membership rules should apply to the new quality assessment units? My worst fears will be confirmed if those are staffed largely by former HMI employees, which I gather is the present intention.

Perhaps I may end by offering my noble friend the Minister a little advice about Clauses 64 and 67, which have drawn so much fire from so many of your Lordships this evening. I will have no difficulty in supporting those clauses, because I know that "academic freedom" is often advanced as the cloak for what is in fact academic self-indulgence, which leads inevitably to poor academic quality. I also understand that the Secretary of State must be ultimately responsible for the £5 billion which we pour into our higher education system every year. If by any chance Clauses 64 and 77 should be, shall we say, tampered with on their passage through your Lordships' House, I hope that my noble friend will remember what I have said about quality assurance. After all, the aim of Clauses 64 and 77 is in no way to interfere with genuine academic freedom, which most of us would die to defend, so much as actually to safeguard it. But, academic freedom includes a sacred duty to academic quality and if some of the CNAA's safeguards can be extended across the binary line academic freedom and academic quality are more likely to go hand in hand in future.

9.37 p.m.

Lord Kilmarnock

My Lords, the final speaker from the Back Benches is in a delicate position. He must not attempt to make a winding up speech on Front Bench lines, but he cannot refrain from referring to what has gone before in a long debate. I shall try to be brief. First, a linguistic point: in Clause 2(5) do we have to incorporate in statute the phrase: A council shall discharge their functions"? We have become accustomed to the Government as a hydra-headed monster taking a plural verb, although I do not like it; but should that apply to a poor, wee council with perhaps 12 to 15 members? So I give notice that I shall put down an amendment to change "their" to "its". I believe it occurs again in Clause 8, where the Bill provides: Each council …as they think fit". I hope that I shall have all-party support for that non-party point when we come to Committee. I am looking at both Front Benches and the Cross Benches.

I do not propose to venture into the subject of higher education. I shall confine my few remarks to Part I. It has been suggested that the Bill is motivated primarily by the political desire further to weaken the influence of LEAs and to transfer another large tranche of funding to central government in the wake of the poll tax. There is an undeniable loss of control by local authorities, but I also note and welcome the decision to lift the ban on local authority councillors becoming eligible to sit on governing bodies on their personal merits. That is a small but welcome piece of evidence of a long overdue thaw in the cold war between the centre and the periphery. I hope that it will be carried further.

In contemplating the creation of the new sector, it is worth recalling that the earlier transfer of polytechnics, as they then were—I dare say most of them are now seeking to pluck the apple of university status—from local authority control was widely welcomed by their directors and boards and has been counted a success. Let us hope that further education and sixth form colleges will benefit similarly from their new freedom. The noble Baroness, Lady Blackstone, thought that that was a spurious analogy. I do not agree with that. However, I do not want to go any further into the institutional debate. We cannot be endlessly wrangling about the interests and demarcations of producers. I want to look at the proposals from the receiving end, from the colleges themselves and their students.

One of the most significant passages in the White Paper was to my mind that which liberated sixth form colleges from school regulations and encouraged them, in paragraph 5.11, to review their range of activities and to increase their offering of vocational education". On a smaller scale, that breaks down almost as important a binary line as that between universities and polytechnics, on which much more attention has been lavished. Why is it so important? It is presumably one of the objects of the Bill to increase participation by 17 and 18 year-olds in post-compulsory education, and the noble Lord, Lord Belstead, confirmed that in his opening remarks. That may be dictated partly by the recession and the political desirability of limiting the number of unemployed school leavers at 16- plus. That may be one of the Government's motives. But most motives are mixed. The result of abolishing that binary line between FE and sixth form colleges in the new sector could be of far-reaching importance. I am afraid that I must disagree with the noble Lord, Lord Beloff, that there is no educational justification for that. I believe the noble Baroness, Lady Carnegy, though she is not in her place, was of the same opinion as myself.

I speak with a little experience of the matter. When I was a governor of a sixth form college the staying-on rate of 17 and 18 year-olds in an inner city area was raised dramatically by the broadening of the menu to include certain vocational and BTEC courses alongside "A" and "AS" levels. That was essential to the enticement of those who would have run a mile from a straight A-level academy. But it was only achieved by painstaking negotiation with FE interests and, I suspect, by bending the school regulations. That kind or manipulation and rule bending will no longer be necessary for sixth form colleges. For that reason, if for no other, I welcome that part of the Bill.

In case people start grumbling about the dilution of standards or matters of that sort, let us be clear about the numbers we are talking of. There are just over 100 sixth form colleges, with some 75,000 students. The vast majority of sixth formers—238,000—remain in schools, most of which are still controlled by local education authorities. Those that are not are in grant-maintained schools, which are also subject to school regulations. Those schools can still build their ethos round successful sixth forms in a more academic mode. I believe that it encourages a healthy pluralism and I do not oppose it.

However, I believe it is rather silly to insist in Clause 14(6) that a sixth former in a school is still a pupil while his opposite number down the road at a sixth form college is presumably a student. I should have thought that in the post-compulsory world that distinct ion could be counter-productive and I ask the Government to look at it again.

I have one or two slightly more substantial reservations and queries. The White Paper seems to endorse a Robbins-type approach to further education with the words in paragraph 4.6 that one of the councils' main responsibilities will lie in, securing enough provision for further education, [and] ensuring that suitable full-time courses are available for all young people who want them". That suggests that, rightly, the whole sector will be demand-led. After all, it will be post-compulsory education and applicants, armed with market information, must be the only people qualified to decide which courses they should follow.

However, manpower planning soon rears its discredited head. In apparent contradiction to the Robbins approach, the Government retain reserve manpower-planning powers. In England, according to paragraph 4.4 of the White Paper, the regional arms of the council will, work closely with the … TECs, taking account of their views of labour market needs and local vocational and educational training and provision". Would it not be preferable to give students themselves the benefit of labour market information in their careers advice, rather than imposing central restrictions on the courses available to them?

Additionally, and more importantly, Section 7 of the Bill endows the Secretary of State with great powers over the direction of institutions. That point has already been made in relation to higher education by the noble Lords, Lord Flowers and Lord Walton, and the noble Baroness, Lady Seear. According to Clause 7(1) and (2), grants can be made with any number of strings attached and requirements imposed. While the Secretary of State cannot dictate terms and conditions to a specific college, he is left with significant powers of' direction over small groupings of institutions. That is, in effect, the mirror image of Clauses 64 and 77. Those clauses have been widely deplored. I am afraid I disagree with the views of the noble Lord, Lord Pearson of Rannoch. In my submission it would be wrong and against the spirit of a basically liberating Bill if those powers were exercised to buck the market in education and to second-guess where the best interests of the further education student lie.

I have a further point and with it a question. It would be interesting to learn whether the division of funds between grants from the new councils and the money that follows students via the training credits scheme will be relatively fixed once established or whether the proportions will be changed in favour of the latter. What are the Government's intentions here? If training credits are to be a significant part of FE institutions' income, that is another reason for not seeking to deny students the courses of their choice.

As the noble Baroness, Lady Seear, said in relation to higher education, a market-oriented government should accept that customers, or consumers—or whatever one wishes to call them—are the best people to decide what ought to be taught. The important question here is whether the Government intend to stand by their commitment to free choice and open access as stated in the White Paper. There remains the question of the funding of increased participation. Almost all noble Lords have mentioned this. It is extraordinary that the Explanatory and Financial Memorandum to the Bill refers only to the effects of the Bill on public service manpower. There is no reference to the expenses of colleges in converting to independent status, as referred to by the noble Lord, Lord Walton. There are apparently no other costs. Is it conceivably possible to engineer a significant expansion on a cost neutral basis? Paragraph 6.3 of the White Paper states: In setting the level of funds available for distribution each year the Government will take account of the demographic trend, the trend in participation levels and the scope for increased efficiency within the sector". That suggests to me a Treasury cap. It is a formula for keeping undue expansion in its place and slapping it down. I hope the Minister will be able to assure me that my interpretation of that passage is wrong.

Finally, I am not clear about a further matter. Perhaps I am at fault because I have not read the Bill carefully enough on this matter. To what extent will the further education council be able to support new colleges? I see there is a provision for voluntary aided colleges to opt into the new sector without having to fund the 15 per cent. capital cost they have had to fund hitherto. But what will happen in the case of new colleges which may wish to be born in response to new demands? Will they also have that privilege? Will the council be able to act as a midwife for an increasingly variegated and plural system? We desperately need that to be the case. I shall be interested to hear the Minister's response.

9.48 p.m.

Lord Hooson

My Lords, as one who is not involved in higher education at all, I have come to the conclusion that it is difficult to be briefed on the subject unless one happens to be my noble friend Lord Kirkwood, who delivered his pertinent contribution in two minutes flat. However, I have found this to be a fascinating debate. Indeed we have heard a notable and knowledgeable contribution in the form of the maiden speech of the noble Baroness, Lady Perry. On behalf of these Benches I congratulate the noble Baroness and wish her all the best for the future. We look forward to hearing her contributions in this House.

My overall impression of the debate is that there is more direct criticism expressed of Part I of the Bill and greater scepticism expressed with regard to Part II of the Bill. The most optimistic view of the Bill was taken by the noble Earl, Lord Stockton. I am glad to see he has just resumed his seat. That view was in stark contrast to the speech of the noble Lord, Lord Flowers, who felt the Government had no overall plan in mind. He felt they had no sense of direction.

Our view on education was eloquently set out by my noble friend Lady Seear at the start of this debate. I was interested in the most challenging speech by the noble Lord, Lord Beloff. He is absolutely right to say that the Bill deals simply with structures to enable the country to match resources to programmes. That is all it does. Everybody appears to be in favour of doing away with the binary line between universities and polytechnics, although there is a strong element which regards it as a cosmetic exercise for the years to come rather than anything else.

In basing his main attack on Part II of the Bill on the fear of inflation, the noble Lord, Lord Beloff, may be right. But he might equally have based it on the fear of bureaucracy. A great many young academics today, as well as people in many other spheres in this country, are concerned about the growth of bureaucracy. One sees it even in business. Whereas in their first five years this Government seemed, creditably, to launch an attack on bureaucracy, over the past five or six years we have seen an incredible growth in bureaucracy. I cannot imagine anything worse for the standards of higher education in this country than for distinguished researchers, heads of department and bright young lecturers to spend much of their time preparing reports on quality and trying to match up their performance to what is expected of them. There is great scope within the Bill for the development of bureaucracy as well as for encouraging inflation.

I agree with the noble Lord, Lord Beloff, that the standard of higher education in this country is extremely good and compares favourably with the Continent, whereas our achievements in respect of the 16 to 19 year-old age group do not compare well. If we have to have priorities, as is sometimes necessary in times of financial stringency whether we like it or not, I agree with the noble Lord that the top priority should be provision for the 16 to 19 year-olds, where we have fallen far behind.

In introducing the debate the noble Lord, Lord Belstead, spoke of the Government's encouragement of institutions which would provide strength in diversity. I agree with him if that will be the result. However, if one is to encourage diversity it is very important to make sure that every polytechnic does not seek to duplicate the work of the universities and every university does not seek to duplicate the work of the polytechnics. There must be some strategic direction here. Who is to give it? Is it simply to be left to institutions to react to funding?

There is a great deal to be said for regional consortia. For example, I believe that in the South of England there is a voluntary consortium made up of three or four universities and four or five polytechnics which co-operate with each other. I think of the University of Wales—it is the only university that I know—which is a federal university and therefore has many advantages. There is a great deal to be said for the federal university providing strategic direction and ensuring that there is no wasteful competition between constituent colleges. Although it might have the word "university" in its title, I should like to see the Polytechnic of Wales, which is the only polytechnic in Wales, become the University of Wales Institute of Technology. Given the prestige of the Massachusetts Institute of Technology, it amazes me that we have not developed that concept more in this country. There is a distinguished institute of technology in Manchester, but there is great scope for the different kind of approach offered by an institute of technology compared with a university.

Perhaps I may refer briefly to Clauses 64 and 77. The evil that men do lives after them and it is a great mistake to leave in any Bill a dangerous provision such as we have in Clauses 64 and 77. Of course, one does not anticipate that the present Minister or his immediate successors might use it, but it is a dangerous provision and it might be used. It should not be amended so much as scrapped. I disagreed with the noble and learned Lord, Lord Simon of Glaisdale, when he suggested his amendment. He did not take his own sound advice not to seek to draft an amendment on one's feet. The amendment at which he appeared to hint seemed to invite interference by a busybody Secretary of State. The more one spells out such matters as misuse of public funds, the more likely one is to attract someone to test that out. There is a great deal to be said for scrapping that power.

I should like to mention three points with regard to further education. First, I cannot understand why the Government are so keen to marginalise local education authorities, which have great experience. I am not suggesting that the further education colleges do not want to be free-standing and do not want to be controlled simply by the local educational authorities. I cannot put the case any better than it is put in a hand-out which was sent to me—we have all received so many—and which includes a quotation from the London Borough of Redbridge, which is apparently a Conservative borough. It states: It is proposed to remove all LEA representatives from the governing bodies. No good reason is put forward for this and there are strong grounds to continue some representation in order to maintain links with the rest of the local education service, including adult education, schools, careers service and the youth service (and, indeed, also as major employers within the area)". That is strong common sense and the LEAs should certainly have some representation.

Secondly, I want to express doubt about sixth form colleges. It is wrong for sixth forms in schools to operate on a different basis from sixth form colleges. We should either scrap sixth forms in schools and have sixth form colleges or, alternatively, all sixth form education should come under the local education authority.

My final point relates to adult education, which is so important. Any provision in a Bill which states that an authority may provide services means that in times of financial stringency those services will be the first to go out of the window. There is therefore a good deal to be said for ensuring that the provision of adult education is an absolute must for authorities because it has made such a valuable contribution in this country.

I have already taken 10 minutes and no one will thank me for going on longer at this time of the night.

9.59 p.m.

Lord Peston

My Lords, perhaps I may start by thanking the noble Lord, Lord Belstead, for introducing the Bill. I echo the remarks of the noble Lord, Lord Hooson, about the interest and quality of all the contributions. There have been many important contributions from all parts of the House. I hope that noble Lords will accept that it is only lack of time and not discourtesy that prevents me from commenting on most of the contributions, either to agree with them or occasionally to put the case against them.

How is a Bill like this to be judged? I can think of two answers to that question. The Government might say—I understand that they are saying—that great educational advance will result from it; or again they might say-and indeed are saying—that at least it will add to efficiency. I am bound to say that so far on neither set of criteria has any convincing case been put forward.

On the matter of efficiency, as so many noble Lords have said, what in fact we are offered is bureaucracy. We are offered new, centralised bodies in the further education and higher education funding councils. We also have Clauses 64(2) and 77(2) which enable the Secretary of State and his officials—let us not forget that—to poke their noses into matters which do not concern them and where they can do much more harm than good. The only noble Lord who said anything in favour of those clauses was the noble Lord, Lord Pearson. Do not think of a nice man, such as the noble Lord, Lord Belstead, putting them into practice. Think of me putting them into practice and ask what I might do. Then you will know why those clauses should not—here again, the noble Lord, Lord Hooson, is right—remotely appear in the Bill. They should not be amended. They should be taken out.

Perhaps I may reflect on the past. The Treasury was once the government department responsible for the universities. When that role was transferred to the Department of Education and Science (about which transfer, let me say, many people were doubtful), the Conservative government of the day pledged that it would not lead to more interference or indeed any interference in the internal affairs of the universities. It was that pledge which convinced Lord Robbins, who was initially opposed to the move to the DES, that it should be accepted. I speak from memory and I could well be wrong but I think that it was the noble and learned Lord, Lord Hailsham, who was the very first Secretary of State for Education and Science, who gave the pledge. It is sad that Clause 77 appears to be a change in precisely the wrong direction, despite the remarks, which I welcome, of the noble Lord, Lord Belstead. But it does give legislative backing to an interfering Secretary of State.

It is worth recalling that the Treasury itself all those years ago did not believe that it needed those powers to ensure that public money was used properly. What has happened since then to change the position? As I said, I do not remotely believe that this part of the Bill needs to be amended. It simply needs to be driven away.

I believe that quality control ought not entirely but chiefly—indeed in practice it must chiefly—be left to individual academics and individual institutions. I, my colleagues and noble friends are not opposed to external audit but much stricter conditions must be laid down to keep interference within strict and explicit limits. It cannot be said too often—this is as true for further and higher education as it is for schools—that the DES, funding councils and, for that matter, the local education authorities educate no one. It is the teachers at all levels who teach. The Bill has nothing at all to say to them.

More generally on this topic of education, I know of no evidence that further education in this country is expensive compared with what is available in the rest of the world. My noble friend Lord Desai mentioned that point. In higher education we are not among the cheapest producers of high quality graduates; we are the cheapest producers of high quality graduates anywhere in, as it were, the serious world. Whether we are discussing 16 to 19 year-olds, further education more generally or higher education, I am not aware that the record is one of educational failure. Quite the contrary.

Of course there is room for improvement. Far too few young people stay on after 16 and gain qualifications. Far too few young people enter higher education. We need more routes into higher education and the recognition that even if the standard three-year degree (or four- or five-year degree in some cases) is the best way for most students, there are, as the noble Earl, Lord Stockton, pointed out, other ways which are well worth seriously considering and experimenting with. It is also obvious to everybody but the Secretary of State that A-levels are unsatisfactory—there has been little debate about this matter. A broader curriculum which would not mean lowering of standards is what we really need in the post-school area. The Bill does not address that.

The notion of A-levels as a goal standard is absurd and becomes more absurd as the years go by. Perhaps I may say à propos the Secretary of State's recent interventions that only an ignoramus could regard course work as an easy option. Only someone who has not tried to get course work from students could believe that that is the simplest way of getting things done.

I reiterate the main points that other noble Lords have made on funding. First, expansion cannot be done on the cheap. I do not blame the Government for not making explicit remarks in the Bill. That is not the way in which legislation is put forward. However, I should have liked to hear more commitment in the Minister's opening remarks to the provision of sufficient funds. Of course we all favour efficiency nowadays but that is not the same as providing no resources; quite the contrary. The danger is that standards will fall. Noble Lords have heard me say that I believe standards have already fallen in some parts of the higher education sector.

The funding councils will be enormously powerful bodies. I support those noble Lords who have said that their decision-making processes must be transparent. We must know their criteria. The criteria for allocating funds must be publicly known. I am concerned that those bodies will simply become creatures of the Secretary of State, justifying the paucity of provision to institutions rather than pressing the Secretary of State for a proper allocation of resources.

I should like an answer regarding fees in further education, especially with regard to sixth form colleges. Do the Government wish fee paying to be extended in that sector and more of the costs of their own education to be placed on to 16 to 19 year-olds? If not, why is the fee-paying factor put so clearly in the Bill?

I make another economics point in relation to funding. Despite the Government's mismanagement, we remain a rich country. The underlying forces of economic growth make us richer all the time. We are certainly richer than we were 25 years ago, when, for example, the Robbins Committee reported. It might be thought that the richer we were the more we could do for our young people. Further and higher education being a good thing, it might be assumed that we would give expansion in that area the first claim on our funds. Instead, this generation is told that if more students are to receive more education at this level, it can only be done on the cheap. It cannot be achieved unless we find more economic ways to do it. In some cases therefore students will have to accept shorter and more concentrated courses and to attend institutions with fewer facilities; and they must study useful subjects, not necessarily those that interest them—as though anyone can say, as noble Lords have pointed out,a priori what will be useful. I find the argument unconvincing.

I go further than did the noble Baroness, Lady Perry, in her excellent maiden speech. If we are to compete in the more open and highly technological world of the next century, our only hope lies with the quality of our labour force. That means that a great burden will be placed on our further and higher education institutions to provide us with young people possessing managerial, scientific, technological, linguistic and—if they are not genetic—entrepreneurial skills. That is the investment in the future which justifies expansion and a much greater use of resources in education.

I have always been a great supporter of polytechnics. I was a member of the CNAA at the beginning. I was the first chairman of its economic board. It was a pleasure first to welcome the coming of age of the polytechnics as they became independent; and, secondly, the move towards their being able to award their own degrees. I welcome their right—if they so wish, I emphasise—to call themselves universities. It is not obvious to me that they would always find it sensible to exercise that choice but at least they have it. I believe that the polytechnics, encouraged and helped by the CNAA, have been one of the great triumphs of public education in this country.

My whole approach to the polytechnics, in so far as I was able to influence developments in economics and business studies, was to raise the academic standards to those of the universities. That meant that staff should have the time and facilities for research and scholarship. Indeed, I refused to validate degrees that did not provide precisely that kind of time. Students ought to have—but I regret to say that they still do not have—proper facilities for study; notably, first-class libraries. The correct policy was to enhance the polytechnics.

I am totally opposed, therefore, to the development of wholly-teaching institutions in higher education. I take that stance for two reasons. First, since I was a student I have believed that students who are not taught by scholars receive a poorer education. That is the case no matter how efficient the through-put appears to be. In that sense I am extremely conservative in higher education.

The second reason for my opposition is more obvious. I believe that our institutions, in particular the universities, are extremely efficient. They provide the joint products of teaching and research. Depending on which aspect one calls primary we get one aspect for nothing: we have excellent teaching and the free gift of research or one can say that we carry out excellent research and have the teaching for nothing. I am even more conservative in those terms.

I believe that a degree viewed as an educational experience, which it must be, will be a good deal inferior if crammed into two years than if it is extended over three. That has nothing to do with what is being taught. I have already said that I can teach in a single, concentrated year much of the economics that most of my students need. However, I should never confuse that with the process that I like to call education. I am not against change, although my comments might appear to contradict that statement. I believe that in broad terms what we were doing in higher education remains correct.

The Bill is based on at least two prejudices which almost amount to hatred. The first is against local authorities, whose powers and responsibilities are to be reduced again and which are not even to be guaranteed places on the funding councils. The noble Lord, Lord Belstead, said that the funding councils would set up regional committees to advise them on local needs. That statement is extremely paradoxical—what do the Government believe that local authorities are for?

Secondly, we again see the Government's antipathy towards the universities. That cannot be purely political. In my experience the political views of university teachers always reflect those of the country as a whole. It simply is not true that they are hotbeds of anti-Conservatism. As was said by the noble Baroness, Lady Seear, we are observing again the Government's apparent uneasiness in the presence of independent thought and criticism. That was not a stupid remark.

I had thought that all that was supposed to change with the advent of a new Prime Minister. He certainly has the advantage, if that is what it is, of not having been scarred by university life. It has been said that all the problems have arisen because of the failure of Oxford University to award a particular right honourable lady an honorary degree. The noble Lord, Lord Jenkins of Hillhead, is not in his seat but I hope that he will read Hansard. I plead with him and his colleagues in Oxford not to make the same mistake again: please give the Prime Minister an honorary D.Litt. The whole future of higher education may depend upon that.

I wish to ask two or three specific questions. I saw nothing in the Bill about the Open University, although a few remarks have been made about it tonight. Is there any reason why the Open University has been left out? I remain worried in particular about support for part-time students. It has always seemed to me anomalous that what most of us would regard as the most deserving and best motivated group of students is the one group which seems to be totally disqualified from received support. I have asked before why that is so. If it is shortage of funds, could not that group be given priority for the future? I hope that the Minster will say something about that.

Secondly, I am troubled by Clause 4 on persons with learning difficulties. What do the words "shall have regard to" mean? Do they mean that further education facilities must be provided for people with learning difficulties, including provision of their special requirements? Or is it merely an option to be chosen depending on circumstances, one of those circumstances being whether there are sufficient resources available so that, if they are not, consideration will not be given to it?

Do the Government have a view on the future of sixth forms? One could interpret the Bill as saying that sixth forms are now obsolete, that the Government would like secondary education to end at 16 and that everybody should be in the new colleges and FE institutions. That view was held by the most extreme left wing people in education several years ago and, therefore, that has puzzled me. Do the Government have any words of encouragement for those schools which believe sixth forms to be a good thing?

The Minister was asked a direct question by my noble friend Lady David as to whether there is a statutory obligation in the Bill to provide adult education for so-called leisure courses. I hope that that question can be answered this evening.

Equally, the question of further education in prisons has been raised and that too is not mentioned in the Bill. Perhaps the Minister will take an opportunity, either this evening or in Committee, to tell us how the Government see developments in that area. I declare one of my many interests, in that I am involved with NACRO as a member of its education committee. I am convinced that further education has a serious and useful part to play in the rehabilitation of offenders.

Finally, I must refer to something which my noble friend Lady Blackstone said. She said that the Government have introduced the Bill for short-term political advantage. For once in my life, I must disagree with her. The present Secretary of State for Education and Science in his earlier role as Secretary of State for Health introduced the health legislation which has turned out to be a political disaster for the Government. Obviously he now believes that he must finish the job both as regards his stewardship of education in general and as regards this Bill in particular. As everybody knows, the Conservatives now need a period in opposition and the Secretary of State for Education and Science is determined that they shall have it.

As my noble friend Lady Blackstone said, we look forward to taking over for many reasons but, in the context of today's debate, one reason for a change of government is that there is a real need to provide a more sympathetic environment in which further and higher education can flourish.

10.18 p.m.

Lord Belstead

My Lords, we have had a wide-ranging debate today which has covered many aspects of the education service. I join with the noble Lord, Lord Peston, in saying that I am particularly glad that my noble friend Lady Perry chose this debate in which to make her maiden speech. My noble friend has spoken with first-hand knowledge and experience of many of the issues raised by this Bill. As a member of Her Majesty's inspectorate, she was for many years closely involved in assessing the quality of education at all levels. Currently as director of the Polytechnic of the South Bank, she has committed herself in particular to widening access to the opportunities offered by the polytechnic for young people and adults living in south-east London. Her support for the Bill is very significant and her thoughtful speech helped us to focus on the benefits it will offer to institutions, students, employers and the economy as a whole.

It is important that we do not lose sight of the principles underlying the Bill. The Government's reforms of further and higher education will provide a better deal for young people and adults and will increase participation still further.

I am sorry that the noble Baroness, Lady Blackstone, does not approve but there has been widespread support for the reforms in Part I from the FE colleges and the sixth form colleges which will transfer to the new sector. Under the local management schemes introduced by the Education Reform Act 1988 they have already tasted the benefits of greater managerial freedom. It is evident that they are ready to take the step towards full independence and they welcome the opportunity to do so. They are willing partners in the changes that we are putting before the House today, and I have every confidence in their ability to rise to the challenge.

It was my noble friend Lord Limerick who spoke warmly of the new independence given to the polytechnics some little while ago. My noble friend Lady Perry spoke of the experience of the polytechnics, showing that newly independent colleges will be able to thrive and achieve significant increases in participation. Do not let us forget also that the funding of the new further education sector through the new further education funding councils will effectively ring-fence for further education those funds that fall within the scope of the funding councils and will ensure that those funds do not leak out into other parts of the service.

The noble Baronesses, Lady Blackstone and Lady Seear, speaking from their Front Benches at the beginning of the debate both talked in critical terms of the effect that the Bill would have, so they both perceived, on the structure of adult education. Further education for adults has always been statutorily part of further education, and there is nothing new about that. It was so in 1944 and in the Education Reform Act 1988. I should like to assure the noble Baronesses, and indeed the noble Baroness, Lady David, and the noble Lord, Lord Hatch, that the Bill continues in full the duty to provide further education for adults. We do not believe that the division of this duty between the funding councils on the one hand and the local education authorities on the other will be in any way unworkable. The councils' duty will relate to courses that need to be secured at national level, while the local education authorities will be responsible for courses of a more local character.

The Government have given a firm commitment that the resources attributable to courses for which LEAs have a duty will remain inside the local authority stand and spending assessment procedure. A survey of LEAs has been undertaken to help establish the expenditure position, and there will be no good reason for local authorities to raise fees or to close classes. The Bill will in no way reduce funding of further education for adults. Indeed, my noble friend Lady Carnegy was right in thinking that it provides a good deal for adults. It will build on the developments of recent years, which have been impressive. Since 1980 the enrolment of adults on further education courses of all kinds has risen by 27 per cent. In the same period the number of adults enrolling on basic skills courses has more than doubled. This is an excellent record, and the Bill will enhance opportunities and increase participation.

Baroness Seear

My Lords, I am sorry to interrupt the noble Lord. It is important to get this point clear from what he said. Clause 11 says that the local authorities may provide these facilities for the leisure activities of adult education. Is it "may" or "shall"? It could not be more important. Have they a right to claim it, or have the local education authorities merely the permission to do it? It makes an enormous difference.

Lord Belstead

My Lords, it does. The Bill continues in full the duty to provide further education for adults. Although I perhaps ought to be, I am not looking at the text of the Bill, but I give the noble Baroness that repeated assurance.

Let me now deal briefly with the issue mentioned by practically all noble Lords, and that is Clauses 64 and 77. The Government accept the need to safeguard the essential nature of higher education, and indeed the Bill is not designed in any way to be an attack on academic freedom.

Between them, the further education funding councils and the higher education funding councils will dispose of some £5 billion each year. I say, and my noble friend Lord Limerick also said, that it is difficult to believe that anyone can seriously argue that the government of the day, on behalf of the taxpayer, should have no say at all in how that enormous sum of money is used.

In 1988, when the Education Reform Bill was going through, it is fair to claim that the debates in your Lordships' House were about finding the right balance between the necessary accountability associated with the public funding of higher education and the equally important need to protect the autonomy of institutions providing higher education. Although the noble Lord, Lord Hooson, spoke of the need to scrap the powers in the two clauses to which I have referred, the fact is that in 1988, at the end of very extensive debates, the balance that was achieved was supported in this House.

As regards funding council conditions, the 1988 Act provides that these must not relate to the application by institutions of any funds derived otherwise than from the Universities Funding Council or the Polytechnics and Colleges Funding Council. Moreover, the councils are required to consult before exercising their discretion to attach terms and conditions to their grant. There are identical provisions relating to the new councils in the Bill which is before your Lordships. As regards the Secretary of State's powers, the Act recognises that he needs to be able to attach conditions to the funds which he puts at the councils' disposal, but these may not require the funding councils to treat specified institutions in particular ways.

The Secretary of State's power to attach conditions is, I admit quite openly, differently expressed in the new Bill. That is to put beyond doubt that the Secretary of State may attach conditions expressed in the form of objectives to be met, or criteria to be satisfied, before a specified level of grant is distributed. But the Bill retains the proviso that the Secretary of State could not use that power to intervene in the funding of university X or college Y.

Finally, the Education Reform Act recognised the Secretary of State's need for a long-stop power to direct the funding councils to take particular actions. But also, and rightly, in 1988 the Act provided for any such directions to be subject to parliamentary procedure through the negative resolution procedure. I contend that Clause 77, as drafted, does not exceed in scope Parliament's intention in voting through the direction-making power in the 1988 Act. Yes, the power does provide in terms for directions to be institution-specific. But that possibility was the intention in the Education Reform Act. My noble and learned friend the Lord Chancellor made that quite clear to the House three years ago. For example, at Report stage the noble and learned Lord said: The amendments moved on Report in another place have made it plain that the Government will not interfere between the Universities Funding Council and particular universities except in extreme circumstances". The only reason why the new power is expressed differently —in other words, subsection (2) has been added to Clause 77—is that we are now advised that the present one does not allow the Secretary of State to make an institution-specific direction in the way which was explained by my noble and learned friend the Lord Chancellor three years ago.

I am grateful to noble Lords for having allowed me to run over the ground. I repeat that I recognise the sensitivities which surround the issue. I also repeat that the prime consideration for the Government has to be that they retain a reserve power. I also repeat that it is not easy to see how the clause can be amended in such a way as to retain that position. Nevertheless, in that context I repeat also that I have listened carefully to your Lordships today and that the Government will of course consider seriously and genuinely any amendments which might be brought forward on the subject.

Perhaps I may now try quickly to answer some of the points put by your Lordships in the debate. The noble Baroness, Lady Blackstone, was critical of the relations which there would be as regards planning between the new independent colleges under the Bill, the schools and those responsible for training. It is expected that in fulfilling their responsibilities the new councils will liaise closely with training and enterprise councils, local education authorities and other bodies which have responsibility for complementary provision of services. That function is likely to be carried out at regional rather than national level. There is also the provision in the Bill for the setting up of regional councils.

The noble Baroness and the noble Lord, Lord Kennet, were concerned that the funding councils would be too bureaucratic and too centralised. The further education funding councils for England and Wales will employ around 440 staff between them, including staff serving the regional committees in England, but that increase will be offset by a reduction in local authority staff currently involved in the administration of further education.

The noble Baroness, Lady David, asked whether the residential colleges for adults would be jeopardised by the Bill. I believe that the Bill poses no threat to the colleges. The colleges will be funded by the funding councils. The Government are aware of the distinctive characteristics of the colleges and will be making that clear in guidance to the funding councils. The colleges have an important role to play in providing access to education for disadvantaged adults. If I may say so, the intervention of the noble Baroness was important on that matter.

Baroness David

My Lords, I said that I had heard that the colleges would not be allowed to increase their student numbers. Is that correct?

Lord Belstead

My Lords, I am certainly not aware at the moment that that is correct. I promise to write to the noble Baroness on that point.

The noble Baroness, Lady David, the noble Lord, Lord Peston, and my noble friend Lord Pearson all referred to Clause 4, which relates to young people with learning difficulties. Clauses 4 and 11 reflect the Government's policy that disability should not be a bar on access to education. Clause 11 continues the present duty on local education authorities to have regard to the requirements of people with learning difficulties in securing further education provision. Clause 4 places a similar duty on the new further education funding councils. The definition in Clause 4(3) of learning difficulties is the same as in current legislation. That makes it clear that those with either a physical or mental handicap are included. The Bill thus ensures that the current duties towards young people with learning difficulties are maintained. I think I am right in saying to my noble friend that the use of the word "may" has to be taken in conjunction with the use of the word "must" or "shall" earlier on and that "may" refers to the buying in of services for young people with learning difficulties if the necessary provision cannot be made in a maintained establishment.

The noble Earl, Lord Longford, expressed concern about the future of the Workers' Educational Association. From April 1993 the further education funding council for England is to take over that part of the WEA's funding now handled by the DES. That part already transferred to local authorities will remain with them. In Wales, funding will transfer to the council for Wales. There is therefore no question of the Government's proposals reducing the WEA's public subsidy. I can give the noble Earl an assurance that the funding council will be able to fund all aspects of the WEA's work, not just those courses listed in Schedule 2.

I turn now to higher education. In his speech the noble Lord, Lord Peston, shot some questions at me. He said that the Open University appeared not to be mentioned. It is mentioned in Clause 58(7). I am repeating myself, I know, when I say that the power in the Bill is for the funding to come from the funding councils of England and Wales. We envisage that in practice the funding will come through the English funding council. But I went out of my way to say that this is an aspect we may like to discuss in Committee and that the Government would not want in any way to be hidebound about it.

Several noble Lords, led by the right reverend Prelate the Bishop of Guildford, expressed concern not about the principle of the dissolution of the CNAA but about the effects it will have and the timing of it. The noble Baroness, Lady McFarlane, and my noble friend Lady Cox were among those who mentioned that. I should tell the right reverend Prelate that there is no reason to suppose that the dissolution of the CNAA will affect the ability of existing students to complete their degrees. The students will continue to follow the courses for which they are registered at the institution where they are studying and, on completion of the course, those students on courses at an institution which has become degree awarding will receive that institution's degree. Students at institutions which are not degree awarding will receive the degree of the degree-awarding body which will replace CNAA as that institution's validating body.

Both noble Baronesses stressed strongly that they believe there is a difficulty about the timetable for the dissolution of the CNAA. I know that CNAA officers are in constant touch with institutions about the implications of the council's dissolution. They are also in close touch with the Department of Education and Science. There are over 70 institutions already in a validation arrangement with a university. Therefore, it is not an impossible task. But I shall obviously draw my right honourable friend's attention to the concerns which have been raised today over the timetable. Incidentally, an interesting and ingenious suggestion was made by my noble friend Lady Carnegy of Lour that the Open University should inherit the CNAA's charter when the council is dissolved. Obviously I cannot respond to that suggestion tonight; but, once again, I promise that we will consider such a proposal.

In all friendliness, I hope that my noble friend Lord Beloff will not mind me saying that I believe he is in the minority by not welcoming the ending of the higher education binary line. As my noble friend Lord Limerick said with some eloquence, polytechnics should have parity of esteem with universities. But I do not think that they do. Our competitors in the world are all expanding their higher education. My noble friend mentioned those whose fathers and grandfathers had been fortunate enough to go to university. However, many students in the past were simply not able to go into higher education no matter how well they were qualified. The Government's policy of expansion will ensure that this no longer happens. Doing away with the binary line is part and parcel of that process.

There is another major issue with which I think I should deal. It was raised by my noble friend Lady Park and by the noble Lords, Lord Desai and Lord Walton. I refer to the general issue of quality assessment. The purpose of external assessors visiting institutions is, as your Lordships will know better than I do, to provide an informed and objective view of the strengths and weaknesses of an institution's provision. Such assessments carried out by Her Majesty's Inspectorate in the past have been welcomed as being enormously helpful by polytechnics and colleges as an aid to their academic and managerial planning. They have also been of value to the Polytechnics and Colleges Funding Council in informing its funding methodology.

The noble Lord, Lord Walton, referred to what he perceived as being a danger to academic freedom in this respect. We do not envisage that the assessment units will seek to encroach upon the academic independence of universities. They will work within guidelines to be established with the funding councils. The White Paper expressed the Government's expectation that the councils will consult institutions on the assessment methodology. The councils are also required to establish quality assessment committees to advise them on that. Those committees must have a majority of members with experience in an institution funded by the councils.

Perhaps I may say a brief word to the right reverend Prelate the Bishop of Guildford, who has sat throughout the whole of today's debate having spoken quite early on. I agree with his remarks about the distinctive and important contribution that the colleges, especially the denominational colleges, make to our higher education. They have flourished under the PCFC, and there is no reason why they should not continue to do so under the new framework.

As to criteria to further development, the Government's proposals are that any institution should be given degree-awarding powers provided that it can demonstrate the necessary rigour in its internal quality assurance. It is true that the proposed criteria for receiving a university title would exclude colleges with fewer than 4,000 students - a point made by the right reverend Prelate. I shall of course draw to the attention of my right honourable friend the Secretary of State the points made by him in that respect.

Although he is no longer here - he told me that he had to leave - I should like to record a point made by the noble Lord, Lord Dainton, about membership of the funding councils. Clause 58 retains the wording of Section 131 of the Education Reform Act in that it requires the Secretary of State to have regard to the desirability of appointing members to a higher education funding council who have experience of and have shown capacity in the provision of higher education. I have no doubt that my right honourable friend will want to ensure that there is a sensible balance of experience within the membership of the new councils.

That leads me, lastly because of time, to research. My noble friend Lord Soulsby of Swaffham Prior expressed anxiety that the Bill's effect might be to create a three-tier structure of research, teaching and intermediate universities. I assure my noble friend that that is not the Government's intention. Their policy remains as set out in the White Paper. Funding will be based upon an assessment of individual departments, not institutions. We have no intention of imposing an inflexible structure, but as a result of assessment carried out department by department some institutions will inevitably fare better than others in competition for funds. Some may fare worse than they do now. If that is because funds are being allocated to better effect elsewhere, then I do not see that that is objectionable.

My noble friend Lord Renfrew has also sat tirelessly throughout today, and I say to him that the Government's policy is that there should be selectivity in research in pursuit of excellence, as he said. The new universities will be competing of course with existing universities for that research funding, both from the funding councils and research councils.

If your Lordships will forgive me, I believe that that is probably as much as the House can bear from me. I end by saying that in bringing forward the Bill I believe that the Government demonstrate their commitment to an expanding and diverse system of further and higher education. I believe that the Bill is good news for young people and adults, for institutions and for the economy as a whole.

Lord Hatch of Lusby

My Lords, before the Minister sits down, perhaps I may ask him whether he can give the House an assurance tonight that he will clear up the ambiguity which arose from the question put to him by the noble Baroness, Lady Seear. It referred to Clause 11(2), which states: in respect of education to which section 3(1) of that Act applies a local education authority may". Should not that word be "shall"? Will he clear that up, not necessarily now but before the Committee stage?

Lord Belstead

My Lords, I shall write to the noble Baroness. I apologise for not knowing the answer this evening, and I shall send a copy to the noble Lord.

On Question, Bill read a second time, and committed to a Committee of the Whole House.