HL Deb 21 February 1992 vol 535 cc1451-73

11.34 a.m.

Lord Strathclyde

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

The proposals set out in the Bill give effect to the policies for the reorganisation of further and higher education contained in the White Papers Access and Opportunity and Higher Education: A New Framework, which were published last year. They provide the framework for the achievement of a greatly expanded system of further and higher education in Scotland. We aim to increase participation and open up many more opportunities for individuals to benefit. Education has always been vital in Scotland, and we mean to ensure that access to post-school education is widely available. It is for those reasons that the Bill has been warmly welcomed by colleges and universities throughout Scotland.

Three themes run through our reforms: autonomy, access and choice. The best way of ensuring that education is tailored to meet the real needs of students is to devolve responsibility for management to institutions. The staff of those institutions, guided by representative governing bodies, are best equipped to make decisions about the day-to-day administration of their universities and colleges. The role of the centre is to provide coherence and a fair and equitable system of funding support. Our policies are aimed at achieving the right balance between local autonomy and central oversight.

If we are to increase participation, we must open up access beyond the traditional routes into further and higher education from schools. Further education is increasingly becoming an alternative stepping stone into higher education. Much more could be done to ease progression between further and higher education and we shall continue to encourage that. We have already achieved much through our support of the Scottish wider access programme and our funding support for the modularisation of Scotvec's advanced qualifications. Opening up access to those in work and those at home through open learning and part-time provision also offers scope for expansion. The moves being made to develop credit accumulation and transfer systems will stimulate that.

The third theme of our proposals is choice. We wish to encourage a diversity of provision to meet the wide range of needs of individuals. Underlying choice has to be a guarantee that individuals can be assured of quality. We are determined to safeguard standards as we expand provision. We attach importance, therefore, to our proposals to underpin quality assurance and audit. Choice also involves a measure of competition. That already exists, students choose which university or college to attend based on what is offered. That is natural and is a powerful incentive to maintain standards. It does not, however, mean that collaboration should not take place. Improving links between universities and colleges widens choice and ensures greater opportunities.

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

Clause 1 of the Bill sets out a new duty of the Secretary of State for further education, which is defined in Clause 6. That includes vocational and Scottish Examination Board qualifications, provision for those with learning difficulties and access courses to higher education. Clause 2 leaves with education authorities a duty to secure provision of community education and a power to provide that further education which is within the duty of the Secretary of State. My right honourable friend the Secretary of State has made clear that he intends to continue to provide as now financial support to local authorities through the aggregate external finance settlement for the provision of community education and for other further education outwith colleges. That safeguards this important provision. He will report to Parliament annually on the exercise of his duties for further education. Clause 4 gives the Secretary of State power to fund boards of management of further education colleges and others in respect of further education. Boards will be funded on the basis of the full range of provision they currently provide, be it vocational or non-vocational. That, equally, is an important safeguard for existing provision.

Clauses 7 to 10 and Schedule 1 give the Secretary of State the power to establish by order a Scottish further education funding council which would exercise functions on behalf of the Secretary of State, advise, assist and report to him in relation to his functions, and generally provide him with information and advice as regards the provision of further education. To maintain stability in the system such a council will not be established at 1st April 1993, when the further education colleges become self-governing. They will be funded directly by the Scottish Office Education Department, which has long experience of funding the grant-aided higher education colleges in Scotland. Once the new system settles down a future Secretary of State will be able to examine the case for a funding council, taking account of the views of the colleges.

Clause 12 and Schedule 2 provide for the duties, powers, composition and proceedings of the boards of management. Colleges already have councils with delegated powers. Membership of the new boards will be largely drawn from existing members and their new duties and powers will build on their existing delegated powers from education authorities.

Remaining provisions in Part I deal with the transfer of staff, land and property, publishing information on education provision in colleges and control and disposal of property in the run up to April 1993.

Part II of the Bill gives effect to our proposed reforms of higher education. Clauses 37 to 43 establish the Scottish Higher Education Funding Council and set out its composition and main functions. Clause 39 is of particular importance. It gives the funding council a duty to make arrangements for assessing the quality of education provided by those institutions that it funds, with the advice of a quality assessment committee.

Clauses 40 and 41 cover the administration of funding by the council. Clause 42 empowers the Secretary of State to make grants to the council, subject to such conditions as he may determine. Those conditions must be general and may not be expressed so as to affect any particular institution. Clause 43 deals with the provision by the council of information and advice about Scottish higher education.

Clause 44 provides the technical means by which the Secretary of State can designate an institution providing higher education as eligible to receive funds from the council. The Secretary of State, however, cannot designate any of the existing universities. They are eligible for funding automatically. The following clause, Clause 45, transfers to the Privy Council powers relating to the governance of designated institutions. Those powers are currently exercised by the Secretary of State under the Education (Scotland) Act 1980.

Clause 48 allows the Privy Council to make an order conferring degree-awarding powers on institutions. Clause 49, which is one of the most important clauses in the Bill, empowers the Privy Council to approve a change of name for a designated institution, including a university title. In doing so, the Privy Council must have regard to the need to avoid names which are capable of causing confusion with the name of any other institution within the higher education sector.

Clauses 50 to 53 impose a duty on various bodies to provide the council with the information that it requires to carry out its functions. They allow the council to arrange efficiency studies and describe how the powers vested in the Privy Council may be exercised. They also provide for the inspection of accounts of universities and designated institutions by the Comptroller and Auditor General.

Clause 54 requires the funding council to comply with directions contained in an order made by the Secretary of State. The Secretary of State is ultimately responsible to Parliament for the Government's higher education funding policy. He therefore requires a reserve power to issue directions to the council as a last resort. The Secretary of State may only give directions relating to specific institutions in the case of either financial mismanagement or if the financial affairs of the institution have been significantly adversely affected for some other reason. The Secretary of State must also consult the council and the institution concerned before giving such direction.

Clause 55 restates the Secretary of State's powers in relation to teacher training currently contained in the Teaching Council (Scotland) Act 1965, and extends these to teacher training wherever it may take place, not simply in colleges of education. The remaining clauses deal with minor and technical matters.

The Bill is, above all else, about opportunity. It increases access to further and higher education for more Scots by giving greater independence to institutions to adapt and attract students. Our system of qualifications in Scotland facilitates that move to wider access. The reforms will enable the further education colleges to continue to flourish and develop ever closer links with higher education for the benefit of their students and local employers. The advantages are clearly seen by the Association of Principals of Colleges in Scotland, which welcomes and supports our proposals.

The Bill is no less important for higher education. It removes artificial and outmoded distinctions between our higher education institutions, and creates a framework to enable them to respond flexibly, efficiently and imaginatively to the needs of our economy and the aspirations of our students in the years ahead. I commend the Bill to the House.

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

11.45 a.m.

Lord Carmichael of Kelvingrove

My Lords, we are all grateful for the way in which the Minister moved the Second Reading of this Bill. I do not believe that a long Second Reading debate is needed. The Bill was exhaustively debated in another place. Noble Lords who have an interest in the Bill will have read, if not fully digested, the long proceedings which took place there.

This side of the House is concerned with improving the Bill. Some improvements were made to it in another place but many loose ends were left. We hope that noble Lords will assist us to tie them up. We intend to put forward important amendments in Committee in a constructive way. Knowing the reputation of this House in matters of education, we hope and expect to hear powerful arguments from across the Party spectrum. We hope to convince the Minister and the Government of the educational shortcomings of the Bill.

As the Minister said, the Bill is in two parts. The first part relates to further education, and deals with the colleges of further education. We believe that at present they are generally successfully controlled by the local education authorities. The second part of the Bill we shall remodel in a number of ways, although we are generally in support of its provisions. For instance, we are pleased that the binary divide has been at least partly removed. That is welcome, but claims that it has been totally removed are perhaps exaggerated. It has been moved rather than removed. It has been moved down the scale—if that is the right expression to use, without denigrating the colleges and polytechnics that will be left out.

We have more sympathy with the second part of the Bill than with the first part. Let me deal with that first. Four existing centrally funded colleges are to become universities and 13 others will continue as centrally funded colleges providing higher education courses. Some further education colleges will provide higher education courses with the funding for those courses being channelled through the new Higher Education Funding Council.

We are concerned that the new universities that will be created by the enactment of the Bill may not have access to research funding on an equal basis with the existing universities. That issue, which was debated in committee in the other place, was not properly addressed by the Minister of State in that debate. We believe that it is important, if the new institutions are to acquire the standing and not merely the name of a university, that the research base is strengthened.

Scotland is to have 12 universities instead of eight. The quality of that provision can be assured only if additional resources are made available to make it possible for research to continue. I do not believe that funding from industry, important though it is, can be sufficient. Twelve institutions cannot compete for resources which were previously shared by eight, without there being an adverse effect on quality. That takes no account of the parallel changes occurring in England and Wales. The funding provided by the research councils to universities operates on a UK-wide front. Those funds will be the subject of even more fierce competition.

Certainly we shall wish to have reassurance on the funding. But perhaps the most obviously important point, in particular for those who will not be involved in the details of the Bill, will be the one that has been referred to as the Bill of amendment which was contained in the English Bill. It deals with academic freedom. Amendments will be tabled covering that issue. However, I am fairly sure that the House will be pushing at an open door on that matter and that the Minister will be happy to make concessions on much the same lines as provided in the amendment of the noble Lord, Lord Beloff, to the English Bill.

Part I of the Bill, which deals with further education, gives us much greater cause for concern. We believe that it is motivated by a desire to reduce the powers of local authorities still further. The Government have done a great deal of that during their period of office. From the Government's point of view it has also given a way of reducing local council charges by taking an important part of the education budget away from local authorities.

We believe that the Government have completely misunderstood the vital local nature of further education colleges, which, unlike central institutions, form an integral part of the regional education system. Further education colleges are much more local, with most of the students living locally. The Government's claim that choice will be greatly helped is partly true but only in the big conurbations. It would not be true in more isolated places. With regard to further education colleges a high proportion of students live at home. That limits their possible choice.

The colleges are part of the community. They are known to the people in the area through a wide range of informal education uses. They serve the interests of the whole community and should be part of what ordinary people believe their community to be. They should be locally accountable through the democratic local councils. We shall seek to press that issue on the Government again.

We believe that the Government have few friends on this part of the Bill. Even The Times Educational Supplement Scotland —which the Government have been known to quote and which the Minister referred to obliquely today in his defence—makes it clear in an article by the chairman of the Scottish branch of the Association of Principals of Colleges, on 29th November 1991, that they have grave misgivings on the Bill. The Minister stated—he probably saw me wince—that the principals of the colleges of further education were in favour of the Bill. What did Mr. Craig Brown, the chairman of the principals say? In the article he stated, The 1989 Act was such a flawed piece of legislation that its successor was inevitable although few people expected it so quickly. We welcome the acceptance of amendments in another place dealing with the special needs provision of the Bill and the power of the future Secretary of State to set up a further education funding council. The latter was accepted rather grudgingly by the Minister of State in another place. Therefore, we shall be pressing the point again at Committee stage in this House. We shall also be asking questions about the proposed boards of management for further education colleges, their selection, composition and self-perpetuation because it strikes us as being a self-perpetuating quango. The Government, of course, vowed to get rid of such quangos.

There are grounds for excluding people from boards of management which are not mentioned in the schedule to the Bill. Although we accept the fact that the business community can make a very good and important contribution to the colleges of education, and perhaps those who have been on the boards have been able to help in many ways, we believe that there can be a conflict of interest with them as well as with other people on the board. We shall certainly take up that issue.

We are also concerned with the transfer of property of the colleges of education. The properties have been built out of public funds by the local authorities. They have been contributed to by local authorities and the Government. We believe that there should be some allowance to the local authority so that they do not still have debts left if the money is transferred immediately to the new set up.

We hope that this House will make amendments to Part II. We believe that it is the correct place to deal in detail with such a Bill. I am sorry that the Government did not accept the suggestion of my honourable friend in another place that the Bill would have been better had a Select Committee procedure been adopted for, let us say, three sittings to discuss some of the details of the Bill. Principals and educationists could be questioned before we debated the Bill. That would have removed a great many of the problems.

We believe that Part I is seriously flawed. We shall give every assistance to improving Part II and to getting it on the statute book. Although we shall have a number of amendments on Part I, we have no intention of deliberately holding up the Bill. We believe that the importance of Scottish education is too great to play parliamentary games. We shall give every assistance to the Minister and we hope that in return he will be able to make some concessions.

11.56 a.m.

Lord Addington

My Lords, for once Scottish legislation follows English legislation. We have ironed out many of the issues and will thus have a smoother ride than with the English Bill. We have drawn up many of our battle lines already.

On these Benches, and I hope on all sides of the House, we are very much in favour of the expansion of university status to those colleges in Scotland which undertake predominantly higher education work. However, one of the anomalies of a binary divide has been exposed in the Bill by the fact that in Scotland many of the further education colleges also take on higher education work. That may be because Scotland did not experience the expansion of the polytechnics.

Therefore, many of the institutions which will take on higher education work will not become universities as they will in England.

An important question arose on the English Bill and will arise on this Bill; namely, that colleges of further education should effectively be given similar controls over their academic freedom and independence to those in the higher education sector. I was never able to understand the divide. Which was more important, further education or higher education? When two institutes undertake similar work the line once again becomes blurred. I hope that the Government will consider favourably some greater form of academic freedom for the colleges of further education along the lines of the amendment put forward by the noble Lord, Lord Beloff, and accepted during the debate on the English Bill. That may go against the grain. However, I hope that the Government will not totally rule the matter out of hand when they consider the somewhat different aspects of the Scottish further education sector, and the fact that the divide is not quite so distinct as it is in England.

We agree with the noble Lord, Lord Carmichael, that further education should be in the hands of local authorities and should be more strongly influenced by them than is at present provided for in the Bill. It is a rather hackneyed argument—I have heard it so many times during the debate on the previous Bill—that local authorities should be at least an even partner in the provision of further education. The local authorities look to their communities as a whole. If people have voted in such authorities, it surely makes sense to give them some input as regards the communities because the local authorities will be representing the communities' interests if they do their job properly. I hope that the Government accept that most local authorities, regardless of political colour, would be prepared to look after what they consider to be the best interests of their constituents. Moreover, as they are closer to the community, they probably have a vague idea of those best interests.

Student representation on the board has been improved. We are in favour of heads of student unions being represented on the board. However, I am not sure whether that is totally adequate. As I stated during our debates on the English Bill, the students must be regarded as the consumers and the heart of the institutions. Everything else connected with an institution is merely the bones; the students put the flesh on it. Therefore, the Government should pay far more attention to what they think.

Many adults are involved in higher education, (although there are a few people under the age of 18) and there are also people involved who are undertaking part-time work. Surely greater consideration should have been given to their input. I shall return to that matter during later stages of the Bill, as no doubt the noble Lord suspects. I hope that the Government will consider making further changes and taking further steps towards considering the attitudes of student representatives, not only those people who occupy positions within the colleges.

Those involved in running a students union already have a job to do and there is a great possibility of overloading people.

The Bill has many positive attitudes, especially in respect of higher education. It eliminates a completely artificial and arbitrary line which developed by accident because it was thought that if two higher education institutions were introduced they would develop along different lines. It has become increasingly apparent that that does not work. I am in favour of Part II of the Bill and will therefore give the Government every support in getting it right. However, as regards Part I, I agree with the noble Lord, Lord Carmichael, that we can see little justification for the removal of the provisions for further education from local control.

12.2 p.m.

Lord Simon of Glaisdale

My Lords, when an English lawyer seeks to intervene on a Bill concerned with Scottish education a word of apology and a plea for indulgence is required. I intervene for three reasons. First, I share to the full the feeling prevalent south of the Border of admiration for Scottish education, not least for Scottish higher education. At times and in certain disciplines it has led the whole world. Secondly, I share the apprehension that has been aroused by the Bill and its counterpart English Bill about academic freedom. Thirdly, I do not believe that those apprehensions can be understood without a knowledge of the common background and of what happened in relation to the English Bill.

I shall speak solely on the aspect of academic freedom relating to Clauses 42 and 54 of the Bill. Before doing so I wish to say that it is a privilege to intervene in a Bill piloted by the noble Lord, Lord Strathclyde. I was an admiring colleague in the other place both of his father and his grandfather. The background to the two clauses to which I have referred goes back a long way. During the previous century there was an institution of government funding for institutions of higher education. Immediately and wisely what was called the "arm's-length" relationship was established. The Government paid the piper and was responsible to Parliament for the money that was paid, but they wisely refrained from calling the tune. Matters proceeded satisfactorily on that basis. In 1919 the arm's-length approach was institutionalised by the setting up of the University Grants Committee common to both sides of the Border. Again, that system worked satisfactorily. At one time I saw something of its working from inside the government department which was then responsible for the funding of universities and institutions of higher education.

In the Education Reform Bill 1988, which was a United Kingdom Bill, there was perceived to be a double threat to academic freedom. That has been resuscitated in the two measures to which I have referred. The Government took power to intervene in individual institutions in two ways. First, they gave directions to the funding council about how it should distribute the funds provided. Secondly, they enabled the Secretaries of State to attach conditions to the grant of funds. That was a double-barrelled weapon. Either barrel would serve the purpose of allowing the Government to intervene in the affairs of individual institutions.

It caused great alarm. The principal contest took place in the other place during the Committee and Report stages of the Bill. However, Members of your Lordships' House played a considerable and important part in the controversy and in helping to achieve the concessions that were ultimately vouchsafed. Since it was a double-barrelled weapon, a safety catch had to be fitted to both barrels and that was done. Neither by direction nor by attaching conditions to grant was the Minister to be able to intervene in the affairs of individual, specific institutions. Everybody was satisfied.

However, within three years an English department brought proceedings in a case which came before Mr. Justice Simon Brown in the High Court. By using the condition-making power the Government sought to increase the accountability of staff for their time in order to ensure greater flexibility of deployment and to introduce appraisal schemes. That was obviously an interference in matters which normally fell within the administrative competence of the institution in question. The way in which the Government sought to intervene on that occasion was to withhold £13 million of the grant for 1990–91. I believe that the actual crunch came in the following year.

In the end, it came to this. Those institutions which could certify that they had satisfied the requirements of the Secretary of State would have released to them what was called their share of the £13 million; in other words, the proportionate part of that £13 million that would attach to the institution. However, those institutions which would not certify as the Secretary of State required would not receive the funds.

Mr. Justice Simon Brown had two issues to consider: whether those were conditions and, secondly, whether they were conditions which fell foul of the 1988 Act. He held, your Lordships may think inevitably, that both those conditions were satisfied. The Minister was trying to impose conditions which would have driven a coach and horses through the provisions and safeguards of the 1988 Act. It was no more than using the funding councils as a conduit pipe. It was really bypassing them and the will of the Secretary of State was to be impinged on the individual institutions. That failed. However, what was seen to be extremely alarming was that the department, having failed in the High Court, then came back and invoked those Bills to reinstate the original form of the 1988 Act; in other words, to renege on the undertakings that had been given to Parliament and specifically to the other place at Report stage.

Naturally, that aroused extremely great apprehension which was all the greater because there had been an undertaking that was gone back on. I may say that it was not an entirely one-sided arrangement because there had been considerable agitation in the other place that the powers of direction should be subject to the affirmative resolution procedure and not left to the ineffective negative resolution procedure. That concession having been made by the Government, the critics dropped that plea.

That was the position when those two Bills came into Parliament in this Session. As regards the counterpart of Clause 54, at the very last moment the Government made a number of concessions which were felt to be satisfactory. They are reflected in Clause 54. I say that that was done at the very last moment because amendments were tabled as starred amendments on Third Reading.

As regards the counterpart of Clause 42—the condition-imposing clause—the Government again tabled an amendment that went some way towards satisfying their critics. That had been adumbrated on Report and was thought to be inadequate. It was then withdrawn but tabled as a starred amendment on Third Reading.

As that was unsatisfactory an amendment was carried against the Government, promoted by the noble Lord, Lord Beloff. As the noble Lord, Lord Carmichael, indicated, that virtually closed the loophole. Perhaps I may read the government amendment which stated: Such terms and conditions may not be framed by reference to particular courses of study or programmes of research (including the contents of such courses or programmes and the manner in which they are taught, supervised or assessed). As that was inadequate your Lordships carried an amendment against the Government which added: or to the criteria for the selection and appointment of academic staff and for the admission of students". The extraordinary thing is that the English Secretary of State has accepted all the amendments made in your Lordships' House, including those which were carried against the Government. However, neither the Government's amendment nor the amendment in the name of the noble Lord, Lord Beloff, appears in the Scottish Bill. I venture to ask the Minister why that should be so and why a safeguard which has been written into the English Bill and accepted by the Secretary of State should not be in the Scottish Bill.

Do the Government really wish the Secretary of State to be able to interfere in the selection and appointment of academic staff or the admission of students? It would be extremely easy to picture the worst scenario that the existing loophole allows. However, perhaps that can be left to a later stage.

As I say, the English Bill and the Commons' history of it, and not least the attempt to subvert and renege on the undertakings and concessions that were made in 1988, will, I believe, cause your Lordships to scrutinise existing loopholes in this Bill with very great care.

12.18 p.m.

Baroness Carnegy of Lour

My Lords, the noble and learned Lord, Lord Simon of Glaisdale, has no need to apologise for intervening in a debate on Scottish affairs. The benefit of his wisdom, experience and thinking on this issue has been appreciated by us all.

Perhaps I may just say to him—and I shall return to Part II of the Bill in a moment—that this Bill has not been drafted in England but has been drafted by the Scottish Office. Many aspects are quite different from the English Bill and it will operate under Scottish law and not under English law, as did the law when Mr. Justice Simon Brown's judgment was given.

The noble Lord, Lord Carmichael, referred to the improvements made to the Bill in the other place. I go further than he did. Thinking back over the nine-and-a-half years during which I have been a Member of this House, I can remember no other Scottish Bill which has been the subject of such effective and fruitful cross-party debate in another place. As a result the Bill has been greatly amended and improved in the House of Commons. A number of the amendments were far-reaching and most were agreed across the parties. At the end of the discussion in another place all parties paid tribute to the Minister on the outcome and he to them. That was a satisfactory procedure on the Bill in another place.

The noble Lord, Lord Addington, said somewhat ominously that, as far as he is concerned, the battle lines on the Bill are already drawn because of the discussion on the Bill for England and Wales. But this Bill in many respects is different to that Bill. The situation in Scotland, particularly in further education, is also different. If there are battle lines—I hope there are not many—they will be different battle lines. That is an important point. I am entirely unbriefed by the Government about this. I say that from my own experience and after discussing the matter with Scottish local authorities and with Scottish college principals.

I shall begin with Part I of the Bill. It is widely recognised, and I agree with the noble Lord, Lord Carmichael, in this regard, that the expansion of vocational education and training—the obtaining of job-related qualifications and skills by more people —is crucial to Scotland's future. Dare I say that it is even more important at this time than the expansion of higher education?

For many years, certainly since I was first involved in the scene in the 1970s, it has been clear that, if they are to work closely with and respond swiftly and flexibly to the needs of industry and commerce in Scotland, colleges need a greater freedom of action than was possible within the restraints of local authority management. The 1989 legislation began that process. It strengthened the college councils, for example, and built on the experience of those that already had extra autonomy.

As a result, further education colleges have matured. Since 1985, when Napier, Glasgow Polytechnic, Robert Gordon and so on chose to free themselves from local authority control, they have flourished and expanded enormously and the quality of what they provide has greatly improved. It is clear that the other further education colleges should be allowed to benefit in the same way. In addition, it is an interesting fact which may or may not be recognised by noble Lords based south of the Border that the number of administrative awkwardnesses which this House identified in the England and Wales Bill do not exist in the same way in Scotland.

My noble friend Lord Strathclyde referred to the fact that in Scotland young people of 16 to 18 years can choose whether to follow further education Scotvec General Certificate modules by staying on at school or by moving on to further education colleges. In fact, because there is plenty of room in many schools at present, many students are being persuaded to stay on. As a result, the number of 16 to 18 year-olds in colleges has reduced markedly. The large further education college in Dundee, the college of Mr. Craig Brown to whom the noble Lord, Lord Carmichael, referred, now has only 9 per cent. of all its students aged under 19. The impending report of the Howie Committee may change that in some respects. But the flexibility of the modular system means that the so-called overall strategy for 16 to 18 year-olds would not be the problem that some suggest if the colleges became their own managers.

Of course the local authorities will be sorry to cease running the further education colleges. They have done it for many years and on the whole have done it well. It is natural also that the lecturers and other groups want to retain their central negotiating role with local authorities as employers. I do not blame them for wanting that. But there are new, huge responsibilities coming to local authorities. Community care, with vast budgets and time commitments and considerable cost for council tax payers, will be an important function for local government and one that is suitable for it with its extremely local nature.

Further education colleges are not quite as local as the noble Lord, Lord Carmichael, suggested. People now travel further. If local authorities become smaller single-tier all-purpose authorities, further education colleges will operate more across local government boundaries than at present.

It is also extremely important for further education colleges, if they are to be able to work closely with the new enterprise councils and with employers, if they are going to be able to respond swiftly, effectively and pragmatically to the education and training needs for the world at work as those needs arise, to know their budget for the years ahead. They must be able to maximise on the use of those funds as they wish. They must control their own payroll, be able to motivate and involve their own staff and deal with their own purchasing and building maintenance. They must not have to wait sometimes for weeks for decisions which education authority officials are bound to make. They must have the scope for tight, efficient and responsive management. Even the most efficient local authority procedures cannot produce that effect. It is not the fault of local authorities; it is the nature of local government and of its responsibilities to the public. It is the way local government has to manage all its enterprises.

The noble Lords, Lord Carmichael and Lord Addington, are right to voice the anxiety of the Convention of Scottish Local Authorities and of teachers and other unions. But on this main thrust of the Bill we must take note of the track record of the colleges which have left local authority control and give others the same scope. The noble Lord, Lord Carmichael, referred to Mr. Craig Brown's article which was censured by CoSLA. I do not believe he has read it too carefully. Mr. Brown is a great enthusiast for the Bill and he and his colleagues would regard it as a disaster if it did not come into being. I can assure the noble Lord of that.

One important change made in the Bill at Report stage is the ability for the Secretary of State for Scotland of the day, when the time is right, to cease funding the further education colleges direct and to set up a further education funding council for Scotland. The noble Lord, Lord Carmichael, said that he welcomed that; his party certainly welcomed it in another place. In another place the Labour Party said that it would like a date set now for its implementation. That would be possible, but I understand the principals of the colleges think that the Bill is wise to make the arrangement as it does.

If the Bill becomes law as it stands there is no way that any Secretary of State for Scotland could fail to set up a council in due course; the pressure on him would be far too great, as we all know. But some time must pass during which the colleges and the Scottish Office, with local authority help, work out the new funding mechanisms, the budgets each college will require, the interaction with the local authority funded bursaries, the funding of people who do not have bursaries, the staff that will be needed to cope with the new corporate status and so on. It would be much easier for all this to be done and a stable system set in place before the establishment of the funding council. We may want to look at this matter in Committee. It seems to me—I believe that the college principals who have to operate the system agree—that Clauses 7 to 10 as now drafted have it about right.

One anxiety has been expressed to me as regards community education. For a number of years I was chairman of the Scottish Community Education Council. During that time the professionals who worked in community education often expressed the view that community education should be defined. That is natural. They want their own field to be seen as a discrete area. That has never happened and no definition appears now in this Bill. Community education has remained an umbrella term, a part of further education which includes adult education, adult basic education, youth work and so on. In my view community education has been greatly strengthened by remaining as an umbrella term within further education. I hope that we shall not change that.

Unlike the England and Wales legislation, the Scottish Bill leaves the very important area of adult basic education, literacy and numeracy and skills education at the most basic level with local authorities where it will be funded in the normal way. At the same time further education colleges that wish to run adult basic education courses which are a preparation for other further education courses can do so and be funded through them. I understand that the local authorities, the colleges and the community education council are all happy with that arrangement.

I turn now to Part II of the Bill. It seems now that the eight Scottish universities, the polytechnics and central institutions are all happy with the setting up of a separate higher education funding council for Scotland. There is a danger that the universities—for example, the University of St. Andrews; I am a member of the court of that university—which attract many students from south of the Border may have more difficulty in doing so in future. That would be greatly to the detriment of Scotland. The noble Lord, Lord Carmichael, made reference to another danger as regards funding, research and so on. We shall doubtless return to that in Committee.

On balance, it seems that to all concerned a separate Scottish funding council is the best way. I understand that the Scottish universities are now satisfied with this part of the Bill except for one reservation which they have as regards the powers left with the Secretary of State. Those are the powers referred to by the noble and learned Lord, Lord Simon of Glaisdale. They relate to Clause 42, setting out the terms and conditions on which the Secretary of State for Scotland may make grants to the Scottish funding council, and Clause 54, dealing with the general directions that the Secretary of State for Scotland may give about the exercise of the council's funding.

It is the same anxiety, as the noble and learned Lord said, which was aired at such length during the passage through this House of the English and Welsh Bill. It is known as the issue of academic freedom. This Bill was drafted differently to the English Bill and it has been amended differently. It has been amended by the Scottish Office in the light of its experience of running the central institutions which it funded directly. The Bill bears that mark.

The Bill was amended in another place at Report stage and it was amended in a different way from the English Bill. At that time Members of Parliament and, I understand, the Government were all under the impression that Clauses 42 and 54 would be satisfactory to all the university principals in Scotland. However, it now seems that the principals, having looked carefully at the two clauses, take the view that the Secretary of State for Scotland will have more power to intervene in their affairs than will the Secretaries of State for England and Wales. They feel that that is wrong and that the wording of the England and Wales Bill should be repeated in the Scottish Bill.

I hope that the Government will feel that that desire can be met. I shall be interested to hear anything that my noble friend may have to say on the point when he replies to this debate. If the Government do not feel inclined to table their own amendments on this matter, I give notice that I shall certainly do so. That having been said, I simply reiterate that the passage of this Bill in its improved form is of importance to the education and training of people in Scotland. We can improve the Bill but I hope that no one, for any reason, will attempt to frustrate it. I hope that at the end of this debate the House will give the Bill an enthusiastic Second Reading.

12.36 p.m.

Earl Russell

My Lords, like the noble and learned Lord, Lord Simon of Glaisdale, I have no wish to provoke a West London question by intervening on a Scottish Bill. I am grateful to the noble Baroness, Lady Carnegy, for her assurance that any misgivings on that point would be unnecessary. We sometimes find in this House, when we consider a Scottish Bill immediately after an English Bill on a similar subject, that the atmosphere becomes a little like Boxing Day. Looking around this Chamber, it does not look particularly like an historic occasion. Yet such is the nature and paradox of the occasion that it is perfectly possible that that might actually be one of the reasons why this might be an historic occasion. For it is perfectly possible that this may be the last piece of domestic Scottish legislation to be considered by the Union Parliament at Westminster. It is at least possible that in a Parliament at Edinburgh there will be more interested parties present on a Friday morning and involved in the legislation than there are here now. I agree—

Baroness Carnegy of Lour

My Lords, before the noble Earl proceeds, perhaps I may say that he has made a political point. It was agreed a week ago yesterday across the Floor of the House to consider the Bill, but then objection was made and the Bill was sidelined to a Friday. The number of Scottish noble Lords on my own side and on the noble Earl's side of the House who would have been present to speak on that earlier occasion, but who are not here now, would have been greater. The discussion has been greatly impoverished by that fact. The present arrangement has not been very satisfactory for the discussion of legislation for Scotland. That is why it does not appear to be like Boxing Day, as the noble Earl described it.

Baroness Seear

My Lords, will the noble Baroness agree that the original arrangement was quite unsuitable and that it aroused great protest on all sides of the House?

Earl Russell

My Lords, I thank my noble friend for that remark. I was aware of the question, but I was not in the Chamber when it was discussed and that is why I have not alluded to it. It seems that there was some difficulty in securing a satisfactory arrangement either way and that rather illustrates my point that there is often such a difficulty about the timetabling of Scottish Bills.

I agree with the noble and learned Lord, Lord Simon of Glaisdale, the noble Lord, Lord Carmichael, and the noble Baroness, Lady Carnegy, about Clauses 42 and 54. In other words, there is agreement from all quarters of the House.

I have noticed that every time we debate a Scottish Bill there are exchanges to and fro across the Chamber about how far Scottish and English law should, or should not be uniform. It might be helpful to the House to consider that as a general question rather than invoking it as a piece of special pleading on every occasion. The circumstances in which I think it is proper for Scottish law to be different are when the Scottish legal system is involved; when there are particular circumstances such as the fact that the Church in Scotland is not the same Church; the principle of what one might regard as affirmative action—for example, the clause in the Act of Union of 1707 which guarantees the survival in perpetuity of the universities of Edinburgh, Glasgow, St. Andrew's and Aberdeen—or that there is, on occasion, a very healthy competition between the legal systems of the two countries. It must always be in order to recommend something on the grounds that it is actually better.

Conversely, the argument for uniformity applies for principles of general fairness incorporated in the equal taxation provisions of the Act of Union, where one is arguing that the other system is better, or for the sake of tidiness and consistency. I would argue that the second and third of those principles of uniformity apply here. I cannot see that any of the normal grounds for justifying differences apply.

I shall not elaborate on what the noble and learned Lord, Lord Simon of Glaisdale, said about Clauses 42 and 54. The specific passages in those clauses that concern people are the use of "notwithstanding" in Clause 42 and the use of the word "outwith" in Clause 54. "Outwith" is a good Scots word. In principle, I am perfectly happy to see it in a Scottish Bill. I am not so sure about seeing it in this place. I know it has been argued that the general intention of the clause is benign. That may well be. But as my honourable friend Mr. Stephen argued in another place, that intention is not embodied in the Bill. It is not clear that the use of that clause would necessarily be denied.

On Part I of the Bill I listened with care to what the noble Baroness, Lady Carnegy, had to say. I agree, as I believe everyone on these Benches does, with the general principles that my noble friend Lord Addington was stating about local authorities. We shall listen to the debate as it goes ahead and see what emerges. I also noticed in Part I a curious point in the drafting of Clause 7 concerning the Scottish Further Education Funding Council. That is drafted in the enabling manner; that the Minister "may" establish a funding council. I was a little intrigued by that because if he "may", conversely, it must mean that he "may not". If he does not, I do not quite understand what is envisaged or what will happen.

We had a good deal of debate on Part I of the English Bill about the case for further delay. I shall not reiterate that. But there is one point in the Scottish situation which seems to be distinctly different. The changes introduced by the Self-Governing Schools etc. (Scotland) Act came into effect just four months ago, so introducing these new changes right on top of them might make change begin to appear a little like a waterfall. I wonder whether there is a stronger case in the Scottish Bill than there was in the English for a commencement date of 1994.

On Part II of the Bill we on these Benches agree formally with what was said by the noble Lord, Lord Carmichael. We are firmly in favour of the end of the binary line. We welcome it. We have been arguing for it for a long time. We argued for it and we voted for it in 1988. Like the noble Lord, Lord Carmichael, we have some misgivings about the way in which it is being done. We agree entirely with what the noble Lord said about the need for additional resources.

Our misgivings may go a little deeper. I note the comments of the Scottish Further and Higher Education Association on the danger to research funding under this Bill. It said: Twelve institutions cannot compete for resources previously shared only by eight without there being an adverse effect on quality. That misgiving is one that we share quite deeply. We noticed what the Minister said about the purpose of the Bill being to achieve wider access. We on these Benches share that purpose. The expansion of higher education is a purpose shared between all three parties. But there is some ground for concern about how that is being done. The most cursory reading of the Bill will illustrate that it is being done by means of promotion of what the Government call efficiency.

The Minister may have noticed an article in this morning's Independent by Sir Peter Swinnerton-Dyer, formerly chief executive of the Universities Funding Council and before that chairman of the University Grants Committee. He should know a good deal of what he is talking about. One point that article serves to illustrate is why the Government have always been so resistant to allowing the funding councils to give advice in public. We are beginning to get some indication of what we may have been missing by that insistence. Sir Peter is very deeply concerned by the effect of expansion without additional resources. He states: The Government describes its application of market economics to university funding as promoting 'efficiency', because it has no means of measuring quality and whether it has fallen". Earlier in the article he stated: No doubt we can bring our unit costs down to the French level if we bring our higher education standards down to theirs as well". That is worth considerable thought as an example of the kind of issues that are causing concern as a result of the reduction of the unit of resource.

I have given the Minister notice that I intended to raise the issue of the freezing of the chair of Scottish history in the University of Edinburgh. There is no more sensible place to have that chair than right on top of the archives. I have worked, in the same day, in the Scottish Record Office, the National Library and Edinburgh University Library. That the main chair of Scottish history should be in that place makes a very great deal of sense.

I received a letter recently from a distinguished American historian of Scotland who is a corresponding member of the Council of the Scottish History Society. What he says is worth thought: If Edinburgh's university leaves the Chair dedicated to the study of the nation's history empty, it will be saying to the people of Scotland, and to the world of historical scholarship, that Scotland's history is so unimportant that its study can be sacrificed for the sake of saving a few pounds". I shall not elaborate on the view which I hold profoundly that by that way we shall not be able to understand English history either. But I will say that this is perhaps an inexpedient moment to give that signal to the people of Scotland.

I think I can script pretty well what the Minister's reply will be. The Minister will say that the Government respect the autonomy of the universities and that decisions about allocation of their resources must be made by the universities within their own priorities according to the resources available. That is a little bit like Hobbes's argument, that the man who jumped out of the top floor window of a burning building was quite free not to do so. There is no dispute about the truth of the argument. The argument is about its significance. Choices are made within the range of possible options, and precisely the argument Sir Peter is asking the Government to address is whether the range of possible options is being narrowed to an unacceptable extent.

There are a few points of drafting to which I should like to draw the Government's attention. Clause 45(2) (c) allows the Secretary of State to revoke the provisions of endowments. The Government heard the remarks of the right reverend Prelate the Bishop of Guildford on revoking trust deeds. The point needs consideration. I was also interested in the provisions of Clause 47 which allow the Government to close any designated institution. The Minister may perhaps have shown how that is compatible with the provision of the Act of Union guaranteeing the survival of the universities of Edinburgh, Glasgow, St. Andrew's and Aberdeen. I would welcome a little further clarification on that point.

Some further clarification that I would welcome on that point concerns the definition of "university" now used in interpreting that provision of the Act of Union. When the Act of Union was passed, when the foundation statutes of those universities were drawn up, a university meant a research university. Nowadays not all universities are to be research universities. Will the Act of Union guarantee the survival of those four universities as research universities, or will it not?

I shall mention only one other point. I noticed in the Explanatory and Financial Memorandum the remark that the Bill has "no EC implications". I am glad that the question has been considered. I wonder whether the answer is correct. There is a good deal of debate with the EC about recognition of educational qualifications. I wonder whether the pursuit of efficiency may cause rather more problems in recognition of our qualifications than the Government are yet aware.

Baroness Carnegy of Lour

My Lords, perhaps I may ask the noble Earl to clarify one point. He referred to Edinburgh University's decision to cease having a chair of history. The university is not closing the whole department. It has decided that the chair is not for the time being necessary. Am I right?

Earl Russell

My Lords, that is my understanding. That is what I said.

12.53 p.m.

Lord Strathclyde

My Lords, I think it was the noble Lord, Lord Addington, who said that he had heard the arguments before, that some of them were hackneyed and that the battle lines were drawn. I am delighted to say that I come to this debate rather fresher than that. Perhaps that is one reason why I have enjoyed it so much. I thank all noble Lords who have taken part in the debate for their great courtesy. I thank in particular the noble and learned Lord, Lord Simon of Glaisdale, who referred to my grandfather and my father. I always suspect that it must be rather difficult for people who end up in the House of Lords to start dealing with the grandchildren of their former colleagues.

We have certainly had a fruitful debate and I should like to respond to some of the comments that have been made. The noble Lord, Lord Carmichael of Kelvingrove, and the noble Earl, Lord Russell, referred to the competition for research resources. All institutions will be free to compete for resources available from SHEFC. It is our firm policy to allocate resources on the basis of quality assessments, thus rewarding the best. We have made it clear that the new universities and other colleges should not change their primarily teaching emphasis. Thus there is no reason to fear the dilution of research effort, which was suggested.

The noble Lord, Lord Carmichael, was concerned that the transfer of property would leave debt charges with authorities. I can reassure him by saying that authorities are reimbursed through the AEF settlement for capital debt charges on a virtually pound for pound basis. That will continue. It is, as I think we will all agree, the most sensible and straightforward approach.

The noble Lord, Lord Addington, referred to student representation. We recognise that students have an important role to play and that is why a representative of the student associations will have a place on the boards. Perhaps I may correct the noble Lord. He indicated that it should be the head of the student associations. That will not necessarily be the case. It will usually be the case but may not necessarily be the case. It is up to the students to decide.

The noble Earl, Lord Russell, made an interesting speech. I shall not be drawn with regard to his views of the constitutional question. He will feel instinctively that we disagree on this, although having said that, I suspect that the noble Earl is a firm Unionist. It surprises me that he cannot see that the proposals which his party is thinking of bringing forward, should it win the next general election, would lead to the dissolution of the United Kingdom.

Baroness Seear

My Lords, I cannot allow the noble Lord to get away with that. He knows perfectly well that devolution can be carried out within the framework of the treaty.

Lord Strathclyde

My Lords, of course it can be carried out within the framework of the United Kingdom, but it could not continue because of the inevitable pressures that would be created between a Scottish Parliament and a United Kingdom Parliament. That is a point of fundamental disagreement between people who believe in the Union and those who believe that devolution can continue within the United Kingdom framework.

Earl Russell

My Lords, would the noble Lord care to pay attention to the preservation of the Union of Spain since the 15th century? If he did so, he might understand our case a little better.

Lord Strathclyde

My Lords, it is certainly my impression that, in the 20th century, where Catalonia has sought to devolve from the central Spanish institutions it has been deemed to be an overall failure. Perhaps we can get back to the issue of the day and the Second Reading of this Bill.

The noble Earl made the point that colleges should not become self-governing until 1994. Of course 1993 is not far away, and in our view a concentrated time-scale is desirable and achievable. A longer period would only add to blight. There are already signs that authorities' spending on colleges is decreasing, particularly in terms of capital expenditure. The noble Earl referred to the article in today's Independent by the former chief executive of the UFC. We have made increased resources available to universities reflecting the growth in student numbers. There clearly is scope for efficiency savings within the system. There is no evidence of a decline in quality. Indeed, it is true to say that the number of first and second class honours degrees has steadily increased in recent years. The Government see no need to introduce top-up fees although institutions themselves are free to do so if they wish. It is a common fact that United Kingdom student support is the most generous in Europe and we have nothing to be ashamed of on that score.

It came as no surprise that almost every speaker in the debate discussed the situation of academic freedom. I am naturally aware of the continuing concern about the drafting of Clauses 42 and 54 of the Bill on conditions of granting powers and directions respectively. The issues involved are both complex and important. Therefore, it is appropriate that they should receive a high degree of scrutiny both within this House and elsewhere. I believe that the noble and learned Lord, Lord Simon of Glaisdale, made that point. As the Minister of State said in another place, the Government are open to suggestions for further improvement to those clauses. I am willing to consider very carefully the views expressed in this House and also to listen to the views of Scottish higher education interests before determining the best way forward. We have not ruled out further amendments.

I am aware that the Scottish universities continue to be anxious, although we understand that the centrally-funded colleges are content with the Bill as now drafted. We amended both clauses in another place in response to comments from the Scottish universities and members of the standing committee. Whether we have done enough is of course a matter for discussion in this House. I have no doubt that we shall have such discussions as the Bill progresses.

Perhaps I may turn now to the point raised by the noble and learned Lord, Lord Simon of Glaisdale, about Mr. Justice Simon Brown. In that case, the Secretary of State was upheld by Mr. Justice Simon Brown.

Lord Simon of Glaisdale

My Lords, surely the noble Lord knows that, although the final decision was in favour of the Government, the construction that the learned judge put on the action was entirely against the Government. That is why these two Bills were introduced in their present forms.

Baroness Carnegy of Lour

My Lords, has the noble and learned Lord, Lord Simon of Glaisdale, considered the point that this would be a matter for Scottish law? Has he ascertained whether that judgment would stand in Scots law? I should not have thought that it would, although I am not a lawyer.

Lord Strathclyde

My Lords, I feel slightly out of depth in this particular argument with the noble and learned Lord, Lord Simon. Perhaps I should just say that the purpose in drafting the Bill is to clarify the powers and not to change them.

My noble friend Lady Carnegy of Lour made a most helpful observation on the Bill. She pointed out that there could be a problem as regards non-Scottish domiciled students at Scottish universities. Because of their good reputation in broad-based educational traditions, universities in Scotland attract a considerable number of students from outside Scotland. Our universities will remain part of the UK education system and will continue to be free to admit whichever applicants they choose. I aim to ensure that the funds which will be transferred to the Scottish Higher Education Funding Council will reflect Scotland's existing share of student numbers.

I turn now to the comments of the noble Earl, Lord Russell, about the chair of Scottish History. Of course, the noble Earl is absolutely right. He already knows what I am going to say; indeed, he paraphrased it. I have no doubt that the university itself will take note of the anxieties expressed both in this House and elsewhere. I believe that it is wrong to suggest that Edinburgh University has been singled out for harsh treatment, or that its recent financial problems arise from government policy, rather Edinburgh's deficit arises from internal financial management problems. However, I understand that those problems are now being tackled and that a recovery plan is in place; but it is inevitable that some hard decisions will have to be made in the process. The university must live within its means.

Earl Russell

My Lords, I have heard government Ministers invoke financial mismanagement on many occasions. But is the noble Lord familiar with the maxim: the first time is happenstance; the second time is coincidence; and the third time it is enemy action?

Lord Strathclyde

My Lords, there are many universities which have not found themselves in the same difficult position as Edinburgh has over the past few years.

In conclusion, I should stress that in the Bill we are creating an efficient and creative system that will meet our pledge to increase still further the number of Scots of all ages entering further and higher education. We have set ourselves a challenging Bill. However, I am confident that we shall achieve its aims. I look forward to the next stages in the progression of the Bill through the House. I commend the Bill to your Lordships.

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