Further and Higher Education Bill [H.L.]

HL Deb 16 January 1992 vol 534 cc423-72

8.6 p.m.

Further consideration of amendments on Report resumed.

Clause 36 [General provisions about transfers under Chapter II]:

Lord Cavendish of Furness

moved Amendment No. 107: Page 28, line 10, at end insert: ("( ) Where arrangements for the supply by a local authority of goods or services for the purposes of an institution to be conducted by a further education corporation are to have effect as from the operative date in accordance with section 24(3A) of this Act as if contained in an agreement made before that date between the local authority and the corporation, paragraphs 2 to 5 of Schedule 5 to this Act shall have effect as if the rights and liabilities of the corporation under the agreement were rights and liabilities of the local authority transferred to the corporation under a transfer to which this section applies.").

On Question, amendment agreed to.

Clause 43 [Remuneration of employees]:

[Amendment No. 108 not moved.]

The Lord Bishop of Guildford

moved Amendment No. 109: Before Clause 44, insert the following new clause: ("Denominational institutions .—(1) In this section "denominational institution" means a further education institution which, when it became a further education institution, was a voluntary school or a grant-maintained school which was a voluntary school before it became grant-maintained (2) The governing body of every further education institution except an institution which on the appointed day was a college of further education shall ensure that at an appropriate time on at least one day in each week during which the institution is open an act of collective worship is held at the institution which persons receiving education at the institution may attend—

1. (a) in a denominational institution such act of collective worship shall be in such form as to comply with the provisions of any trust deed affecting the institution and shall, in particular, he conducted in accordance with the practices and reflect the tenets of the denomination or denominations concerned:
2. (b) in all other further education institutions such act of collective worship shall be wholly or mainly of a broadly Christian character in that it shall reflect the broad traditions of Christian belief but need not be distinctive of any particular Christian denomination.

(3) If the governing body of a further education institution considers it appropriate to do so it may in addition to the act of collective worship referred to in subsection (2) of this section provide for acts of worship which reflect the practices of some or all of the other religious traditions represented in Great Britain (4) In this section "the appointed day" means the day appointed under section 90 of this Act for the commencement of subsection (4) of section 15 of this Act."). The right reverend Prelate said: My Lords, in moving this amendment, I shall speak also to Amendment No. 110. They deal with rather different matters but I recognise their interconnection.

Before I begin I should point out that I am not responsible for the marginal headnote which in this and the following amendments seem to be wildly misleading. Since the amendment was tabled it has been pointed out to me that there is a technical defect in the opening subsections of both amendments. I recognise that now that it has been pointed out to me but here we are debating the principle rather than the technical details of the amendments.

In 1988 an agreement was hammered out about the place of RE and worship in education. The noise of that hammering echoed well beyond the walls of this House. The proposals of this Bill require us to look again at that agreement, although I hope it will not be necessary to cover the same ground again.

At present the provisions of the 1988 Act apply to sixth form colleges; namely, that RE, as part of the basic but not national curriculum, and a daily act of collective worship must both be provided. By transferring the sixth form colleges from the school to the FE sector, the Government remove the requirement for religious education and worship in those colleges. In Committee I sought to maintain the status quo in that respect but the Minister was not content and other noble Lords expressed reservations. The noble Lord, Lord Renfrew, suggested a compromise and my amendments follow that suggestion.

I now propose that the educational institutions concerned should provide religious education and worship but attendance should not be compulsory. Under the 1988 Act parents can withdraw their children from religious education and worship. Under these amendments the students will make that decision.

Thus the amendments would make clear on the face of the Bill the importance of that dimension in education while at the same time recognising the more mature ethos of the sixth form colleges. The 1988 Act refers in its opening section to the: spiritual, moral, cultural, mental and physical development of pupils at the school and of society". At all times we must keep that broad aim in focus. Young people are more than empty vessels waiting to be packed with information and discipline which will make them useful for the labour market. People have rich and diverse gifts and qualities and we should ensure that they have space in which their potential can mature. The spiritual aspect of humanity is an enrichment giving sense and purpose to life. I suggest that we should not lightly abandon now what was recognised as valuable in 1988.

The amendment on worship, like the one that follows, is modest in its requirements. Some may say that it is too modest. First, the act of worship has to be provided but attendance is not required. Secondly, it is not a daily act of collective worship but at least once a week. Thirdly, it recognises that in some institutions there may be people of non-Christian faiths and their needs also should be respected.

I recognise that logic and consistency argue that if what I say is true for sixth form colleges, then it applies equally to further education colleges. My preference would be that the requirements of the amendments should apply across the whole sector. But idealism and logic must be tempered by reality. I anticipate that it would not be acceptable at this time to pull the existing further education colleges into the provision. The amendment therefore indicates that it should apply to sixth form colleges where school regulations are at present in force anyway and to any new institutions which may in due time come into the sector.

In preparing Amendments Nos. 109 and 110 I wish to assure the House that I have been in touch with representatives of other Churches. Had there been more time I would have wished those consultations to be more thorough. As the Minister is aware, he was not able to give me the Government's view till 8th January and that left little time for serious planned discussion. Even so, I assure him and the House that I did what I could within the time available to ensure that what I say represents a fairly wide Christian consensus.

Perhaps I may turn for a few moments to the matter of religious education, which is the subject of Amendment No. 110. Because of the interrelationship of the two it may be helpful to speak to that also. First, I do not conceive that religious education is just straight instruction in the Christian religion. I view it as being part of promoting the, spiritual, moral, cultural, mental and physical development of pupils at the school", and preparing them, as the Act says, for the opportunities, responsibilities and experiences of adult life". In the sixth form context religious education should reach out towards what many secondary schools do under the heading of personal and social education. I still believe that there are four reasons why religious education, broadly understood, should feature in our education system. First, we want to avoid over much narrowness and specialism in the young. The students need to see their academic work in a setting which enables them to evaluate that work in the context of the moral, cultural and spiritual dimensions of life. Under the curriculum guidance for 16 to 19 year-olds, they are currently entitled to relevance, depth and balance. To meet that colleges in my area provide courses under the heading of "complementary studies". It is in that context that they can pursue moral and spiritual values. Religious education is clearly related to that and in my view should not be edged out.

Secondly, supernatural and spiritual experience is widespread. Research has been done on it in Cambridge. It is not an aspect of life which can be disregarded as quaint or eccentric. More obviously, the power of religious conviction is a force to be reckoned with. In recent years we have seen a revival of that power not only in Iran and Algeria but also in this country among people of many different religions. That power of religious conviction needs recognition, analysis, understanding and, if necessary, redirection.

Thirdly, Christianity is a core element in our history, tradition and culture. We may accept or reject the Christian faith; what is undeniable is that it has been formative in our national history. If we want educated people to be aware of who and how we are they need that understanding. Fourthly, there is a case for securing religious education as an academic and examinable subject, among other things in order to acquire qualified RE teachers. Taking RE seriously as an academic subject is linked with how it is viewed in the context of the curriculum.

Amendment No. 110, like Amendment No. 109, requires the colleges to provide religious education but does not compel attendance. The sixth form colleges with which I have been in touch are already doing valuable work in that direction but it is not always secure. To require that RE should be provided ensures that the matter is not overlooked or ignored; it strengthens the hands of those who see the value of this element in education, although it may not be universally acknowledged. I underline that the amendment to do with religious education, like the one providing for worship, applies only to sixth form colleges and to new institutions because that is what realism dictates.

These are modest amendments and I suggest that if what we hammered out in 1988 was right, then they are the least that we should accept in 1992. There are many of us who want to secure the spiritual dimension in education. I beg to move.

8.15 p.m.

Baroness Perry of Southwark

My Lords, I should like to support the right reverend Prelate most particularly in Amendment No. 109 which asks that those colleges moving into the sector shall be required to offer, on a voluntary basis, an act of worship. The right reverend Prelate spoke also to the wish that they should continue to provide religious education.

The amendment asks that we should focus our attention for a little while on what the Bill is doing almost accidentally to the status of colleges which, when coming under the schools regulations and curriculum requirements, were maintaining the Christian presence and making provision for academic religious education. It seems wholly wrong that almost by accident that kind of provision should be removed.

I am pleased that the right reverend Prelate tabled his amendment in a way that requires the provision without requiring the attendance or take-up of that provision. During the Committee stage of the Bill many telling remarks were made in regard to the unfortunate effect on young people of requiring them to do something that they may be disinclined to do. The amendment is well worded and I support it.

Lord Renton

My Lords, I speak first to Amendment No. 109. I too have a great deal of sympathy with the aims expressed by the right reverend Prelate. I too feel that the reform introduced in 1988, which I strongly supported, could and should naturally be carried forward into further and higher education, especially into further education.

Having said that, I wish the amendment were acceptable in its present form. I am sorry to say that as I find for two reasons it is not. The first was referred to broadly by the right reverend Prelate and arises from the definition of "denominational institution" in Clause 9(1). It makes it exceedingly wide. The amendment refers to any, voluntary school or a grant-maintained school which was a voluntary school before it became grant-maintained". The difficulty is that not all voluntary or grant-maintained schools are denominational or were so; there were a great many which were not. Therefore, that definition would have to be considered further with a view to making it more specific and narrower.

There is a further drafting difficulty. I invite the attention of noble Lords to subsection (2) (a), which states: collective worship shall be in such form as to comply with the provisions of any trust deed". The trouble is that there are quite a number of old schools and institutions which may have no trust deed at all, but which have just grown up through the years. That could include some of the Jewish schools that we have in this country. It would also cover various non-denominational schools. Subsection 2(b) goes on to say, in all other further education institutions"— that is to say, those without a trust deed—the form of worship shall be "broadly Christian". Therefore we have reached the stage at which any institution which has not got a trust deed shall be assumed to be Christian. Alas, I do not believe that that will do.

Although I am fully in favour of the spirit of this amendment, I do not see how we can add it to the Bill. Nevertheless, I hope that the Government will consider that the case which the right reverend Prelate has made out is one which is worthy of support in principle.

I now turn to Amendment No. 110, about which there is a further difficulty. The same difficulty of definition arises, but the other problem concerning a trust deed does not arise. Subsection (2) of this amendment states that: religious education is provided at the institution for all persons attending the institution who wish to receive it". It will surely be the case that many people will attend institutions of further education on either a whole- or a part-time basis, with a view to receiving specialised training, and sometimes that will include vocational training. For it to be insisted that religious education should be provided for such people may lead to a problem for the governing body. I put it no more strongly than that. It is a point which raises some difficulty. Although I am sympathetic I have less enthusiasm for Amendment No. 110.

Lord Belstead

My Lords, these amendments refer to the governing bodies of every sixth form college as regards offering collective worship and religious education for the future, but on a voluntary basis, for the student population. I believe that I am right in saying that the amendment would also apply to any newly established institution in the former sixth form college sector.

I recognise that these are very sensitive issues. Following our discussion in Committee, I offered to take them away and give them further thought. I have looked at them with great care and I have had further discussions with the right reverend Prelate. We have corresponded and I must apologise to him that the final correspondence from myself had to be at a late stage.

Although, hitherto, sixth form colleges have been treated as part of the school sector, in many ways they are closer to the college sector, where the curriculum is a matter for decision by institutions in the light of local demand. This Bill will clarify their position by bringing them into an integrated new FE sector with the responsibilities and flexibility that go with that status. The Government believe it right that curriculum decisions in all FE colleges should be for their governing bodies, and should not be dictated by parliament. There will be nothing to stop a former sixth form college from continuing to provide religious education and collective worship.

In former voluntary aided colleges, foundation governors will continue to be in a majority on the governing body. All further education corporations will be able to apply to the Secretary of State to amend their instruments of government; for example, to increase the proportion of foundation governors. I repeat the assurance I have given on two occasions today that any such request from former voluntary controlled colleges will be considered sympathetically. Any provisions relating to religious education in the articles of government for voluntary aided colleges will be retained. Provision will be built into the articles of government for voluntary controlled colleges to ensure that religious instruction is given in accordance with the trust deed. Where the trust deed is silent on religious instruction it will be our intention that the articles will provide that it must be given in accordance with the practice observed by the college before incorporation. I do hope that the assurances will, in the right reverend Prelate's view, safeguard the religious nature of the voluntary institutions.

I appreciate the concern expressed not only by the right reverend Prelate but by my noble friend about the future of religious education in former sixth form colleges. For the reasons I have given we do not feel that it would be appropriate for these colleges to be subject to statutory requirements relating to worship or the curriculum once they become part of the new sector. For the same reasons neither do we believe that it would be right to apply these requirements to new colleges, which is the effect of the amendment. In the light of the assurances that I have given, I hope that the right reverend Prelate will feel it right not to press this amendment.

Lord Renton

My Lords, can my noble friend clarify one point? He said that he did not believe that the question of religious education needs to be written into statute. Can he confirm that there would be nothing to prevent the governing body from introducing voluntary religious education if it wished to do so?

Lord Belstead

My Lords, there is absolutely nothing to prevent the governing body of a former maintained sixth form college—quite apart from the former aided and controlled sixth form colleges—not only from providing religious education but also from arranging that every day there was a collective act of worship which was available for those students who wished to avail themselves of it.

The Lord Bishop of Guildford

My Lords, I take the technical points that the noble Lord, Lord Renton, made about the way in which certain phrases in the amendments would probably need further adjustment. However, both these amendments refer to an important aspect of our educational system and I cannot give up on the issue. I do not think that it would be welcome to the House to divide at this stage of the evening. Because of the technical difficulties, I propose, with your Lordships' leave, to withdraw the amendments, but I believe that I shall want to bring them back at Third Reading. If they are not to be included in the Bill, I shall want to be quite sure that that was being done at the wish of the whole House rather than on the basis of one or two or only a few speeches. The speeches from the noble Baroness, Lady Perry, and the noble Lord, Lord Renton, were very welcome. With the expectation that I shall bring back an improved version at Third Reading, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

[Amendment No. 110 not moved.]

8.30 p.m.

Clause 44 [Variation of trust deeds]:

The Lord Bishop of Guildford

moved Amendment No. 111: Page 35, line 24, at end insert ("and (c) the trustees."). The right reverend Prelate said: My Lords, in moving this amendment I shall speak also to Amendment No. 112. Amendment No. 111 deals with the Secretary of State having power to vary a trust deed. There are two points here. The first is that if the Secretary of State is to vary the trust deed, it should be a requirement on him that he should consult the trustees who may not be necessarily the same group of people as are referred to in the earlier part of this clause. It is the trustees who have the responsibility. There is also some sensitivity about what the Secretary of State may do when he modifies a trust deed.

We have already heard of the anxieties about the Secretary of State's powers in relation to Clause 64 and Clause 77, but there are other places where he seems to be taking fairly considerable powers. I shall therefore move Amendment No. 112 where it restricts the powers of the Secretary of State to interfere (if I may use such a word) in the religious aspect of the trust deed. I beg to move.

Lord Belstead

My Lords, Clause 44 empowers the Secretary of State to modify by order the trust deeds relating to or regulating an institution in the further education sector or relating to the land and other property held for the purposes of the institution. Before making such an order, the Secretary of State is required to consult the governing body of the institution and the persons empowered to replace the trust deed. Amendment No. 111 proposes the addition of "the trustees" in subsection (2) to the description of people to be consulted by the Secretary of State before he makes an order under this clause. Amendment No. 112 would prevent the Secretary of State, as the right reverend Prelate has said, from making an order to amend a trust deed that would affect the denominational character of an institution. I think it is fair to say that there is an equivalent provision in the Education Reform Act 1988. But may I first say a few more words about these amendments.

With respect to the right reverend Prelate, Amendment No. 111 is unnecessary. The description in subsection (2) of persons to be consulted by the Secretary of State is based, as I said, on section 157 of the Education Reform Act 1988. This relates to the variation of trust deeds of institutions with the polytechnics and colleges funding sector. It does not refer specifically to trustees. I have to say that I am not aware of any complaints from trustees about the way in which this is operated.

I can appreciate the wish of the right reverend Prelate that the Secretary of State should not interfere with the religious provisions of trust deeds. However, a requirement that the denominational character of the institution should not be affected is very wide indeed. This could create problems in moving the sixth form colleges into the new sector. I can give an absolute assurance that it is not the Secretary of State's intention to interfere with the fundamental religious character of an institution in using powers under Clause 44. It is difficult to go further than that. I put that to the right reverend Prelate and hope that it may meet with his approbation.

Earl Russell

My Lords, before the noble Lord sits down, can he tell me any circumstances in which the Secretary of State could wish to take powers to change the denominational character of an institution? If there are no such circumstances, why does he need the power?

Lord Belstead

My Lords, the power is needed for the similar reason that it is needed in the Education Reform Act 1988. There is perceived to be a necessity to change the trust deeds when a denominational college is moving from one sector to another. The reverend Prelate has every right to move the amendment; but it comes as some surprise to me from what I have heard about the negotiations and the exchanges of views so far as concerns the Church of England, that this should be causing trouble. The Education Reform Act is there as a precursor. It is necessary to make certain that the religious ethos or religious character of the college concerned is not changed under the power in Clause 44. I have given an absolute assurance about that this evening.

The Lord Bishop of Guildford

My Lords, I am grateful to the Minister for his response. In relation to Amendment No. 111, I am advised that there is some anxiety on the part of my Roman Catholic colleagues in particular, because in those cases the governing body and the trustees are not always coterminous. It seems improper for the Secretary of State to have power to alter a trust deed without consulting the trustees. I find it astonishing that the Government hesitate about such a provision.

I hope that the Minister will at least be prepared to consider further discussions on this matter and to review the position. If in Amendment No. 112 the position is as absolute as the Minister was prepared to give in his undertaking, I am not quite clear why it cannot be written into the Bill. There seems to be a slight inconsistency in the Minister's response. I am anxious that we should not be at variance on this matter. Before he sits down, I ask the Minister if he will give me an assurance that we can continue discussions on this matter rather than foreclose the issue here and now.

Lord Belstead

My Lords, perhaps the House will give me leave to speak briefly once again. So far as concerns the necessity—and this arises from the point made by the noble Earl, Lord Russell, also—one needs to look at Section 157 of the Education Reform Act 1988 to see why the variation of trust deeds was thought to be necessary in 1988. There are a whole series of reasons relating to land and one thing and another which are set out in what is in fact quite a long section of the 1988 Act. Therefore I think there is a legislative reason why there is a need for Clause 44 in this Bill. It is because I was convinced of that that I felt it was necessary to give a very firm undertaking, which I have given this evening, about not affecting the fundamental religious character of the colleges concerned.

I understand why the right reverend Prelate puts the point to me about the trustees and the governors. I do not question the right reverend Prelate's information about their responsibilities not necessarily being coterminous. I take that as being a fact, coming from the right reverend Prelate. Without actually accepting it here and now, I should like to look as carefully as I can at the point that the right reverend Prelate is making in Amendment No. 111. This is no more than a consultation point but it is an important one to see whether I can meet it.

The Lord Bishop of Guildford

My Lords, I am grateful to the Minister. On the strength of that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 112 not moved.]

Clause 46 [Statutory conditions of employment]:

Lord Peston

moved Amendment No. 113: Page 36, line 14, leave out subsection (3) and insert: ("(3) Nothing in this section shall authorise the variation of the terms of any contract of employment otherwise than in accordance with arrangements established by the representatives of the relevant parties to such contracts for the negotiation of their terms and conditions of employment.").

The noble Lord said: My Lords, I shall speak briefly to this amendment. I have no difficulty, broadly, with Clause 46. I interpret it to mean that the statutory conditions of employment and all related matters of staff in an institution which then changes from being an educational institution whose staff are employed by a local authority to an institution in the further education sector shall carry over. I have no difficulty with the clause as it stands. However, we have tabled the amendment because we do not understand subsection (3): Nothing in this section affects any right to vary the terms of any contract of employment". The whole point of Clause 46 is that there should be no change in any contract of employment: so what is the purpose of subsection (3)? What does "any right" mean? What right are we talking about? It may be one of those technical points that lawyers always throw in which turn out to have no meaning whatsoever.

Clause 46 seeks to ensure that if a member of staff was employed in the institution as it was before the passing of the Act, he ought to be employed in the institution in exactly the same way after the passing of the Act. That is the purpose of the clause. I merely require some reassurance that subsection (3) is not a covert way of changing that position. I do not believe that it is meant to be a covert way of changing the position, but I should like an explanation of what subsection (3) is supposed to mean.

Perhaps I should rabbit on for a moment or two longer in order to enable a possible answer to appear. The amendment is important to those working in one of these institutions who want their conditions of employment to be unchanged. I beg to move.

Baroness Perry of Southwark

My Lords, I am not qualified to answer the technical questions posed by the noble Lord. However, I understand why the clause is written as it is and I understand the purpose of the amendment. The clause as drafted protects continuity of service and remuneration, which are important factors, but also protects the right of management in institutions to be able to make variations to some other terms and conditions when an institution becomes a different kind of institution, as may well happen under this transfer.

Certain conditions of service are inappropriate to the kinds of work towards which an institution may wish to move. There are restrictions in some of the existing contracts which may make it difficult for an institution to cope with its independent status. It may well wish to change the contracts of employment of some of its staff. That freedom is an absolute right of management. To require, as the amendment does, that no one's contract can be changed in any detail without full negotiation with representatives would be a dreadful inhibition on an institution wishing to move into its new character. I would therefore resist the amendment.

Lord Campbell of Alloway

My Lords, I hope that my noble friend the Minister will not accept the amendment. First, it appears to inhibit and put a fetter on the right of the employer to contract as he wills. Secondly, it ties into agreements established by trade unions. That is really going a little far in a statute to do with higher education. I hope that my noble friend will not accept the amendment.

8.45 p.m.

Lord Belstead

My Lords, this amendment would be in substitution for subsection (3) of the clause. The noble Lord, Lord Peston, asked about the effect of subsection (3). It safeguards the right of both staff and employer to vary the terms of any contract of employment. Put more colloquially, subsection (3) ensures that contracts are not set in stone and can be varied subsequently. The amendment would tie the hands of both parties through binding them to arrangements entered into by their predecessors for varying contracts of employment; for instance, in requiring them to negotiate with particular trade unions ("arrangements established by the representatives").

We are seeking to establish an efficient and flourishing new further education sector. There is no reason to suppose that the new managements would put at risk a good relationship with employee representatives through adopting inappropriate arrangements on the shape of future negotiations. I agree with what has been said from this side of the House that their staff must be free to decide for themselves and not be constrained by what has happened in the past. For that reason, I resist the amendment.

Lord Peston

My Lords, I thank the noble Lord for that reply. I am astonished that the noble Lord, Lord Campbell of Alloway, who takes an interest in employment matters, should support the Government on this issue. A contract is a contract. Contracts should not be varied just like that. I entirely accept what was said by the noble Baroness, Lady Perry, that if we move into a new era we have to reconsider matters. There is nothing in the amendment to say that one cannot reconsider matters. It does not say that everything is set in stone. One can always say that one would like to renegotiate. I had assumed that subsection (3) had a specific meaning. In fact, without subsection (3) it is still, to my certain knowledge of the law of these matters, up to both parties to renegotiate if the original contracts are inappropriate for the new purposes.

I am concerned both by what has been said and by the Minister's reply. There is nothing in the amendment about trade unions. I have looked at it several times and I cannot see the words "trade unions". If one is a member of staff, prima facie when one moves into a new institution one's first job is to guarantee that one's original position is maintained. The Government categorically maintain that it is. The Government are quite right on subsections (1) and (2) but they have added this rather strange subsection (3). I ask the Minister to think again. There is nothing to stop both sides discussing matters again. If that is all it means, there is no problem. However, it does not have to be there if that is all it means. I assume that it means something in addition—I cannot see what it means.

Perhaps the Minister will reflect on the matter. I feel that I ought to write to him on a matter of this kind. I am not seeking to get involved in trade union affairs. I am simply saying that there are some teachers who would like to feel that their position is as reasonably protected as it can be in the world in which we live. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 48 [Information with respect to institutions within the further education sector]:

Lord Cavendish of Furness

moved Amendment No. 114: Page 36, line 44, leave out from ("achievements") to ("and") in line 46 and insert ("qualifying their students for entry to the institution and the educational achievements of their students while at the institution (including in each case the results of examinations, tests and other assessments), ( ) the financial and other resources of the institution and the effectiveness of the use made of such resources"). The noble Lord said: My Lords, I move this amendment on behalf of my noble friend Lord Belstead. We had a useful debate in Committee on Clause 48, which gives the Secretary of State power to make regulations to require governing bodies to publish certain information. The noble Lord, Lord Peston, and the noble Earl, Lord Russell, brought forward amendments to extend that information to include information about the educational achievements of students prior to their enrolment at an institution and information relating to the effective use of financial and other resources. As I said in Committee, the Government accept the principle underlying their proposals.

Following that debate the Government have given very careful consideration to the suggestions made. The amendment which I am pleased to bring forward today is indeed based on those proposals. I should like, however, to make a couple of points. The first part of the amendment concerns the publication of information about the educational provision made by the institution and the achievements of students. The Government's objective is to require the publication of information which will be useful to young people, parents and employers. There is a great deal to be said for keeping that information as simple as possible, to allow the users to form their own judgments.

The purpose of the amendment is to give the Secretary of State the power to require the publication of information showing the value added—in terms of student qualifications—by the institution. I do not, however, want to give any commitments today as to when we might bring this requirement into effect. I think that noble Lords opposite will accept that we need to look very carefully at how that might be done. We need to ensure that the information can be presented in a coherent and reasonably straightforward way. I would stress, therefore, that by introducing the amendment, the Government are not committed to requiring the publication of such information.

In particular, we want to reflect a little further on whether the power proposed in the amendment is sufficiently wide in scope for the purpose. We have been anxious to avoid going too wide. However, there is some doubt as to whether this amendment is sufficient. I should like to propose that the House approves the amendment now; if we conclude that we can improve the drafting, I suggest that we return on Third Reading with a further amendment.

The second part of the amendment concerns the publication of other information which might be used as performance indicators. The Government have already called upon colleges to produce some of the information proposed by the amendment for colleges' own management purposes. As we said in Committee, many colleges will want such information to be published to enable them to evaluate their own performance in relation to that of similar institutions.

Having said that, we are also concerned about the consequences for colleges of any immediate call for the publication of the full range of such information. Before making appropriate regulations, we shall have to be sure that colleges have systems in place—and preferably computerised systems at that—which are capable of generating the information required in a cost-effective manner. I hope that your Lordships will welcome the amendment. I beg to move.

Lord Peston

My Lords, perhaps I may briefly thank the noble Lord, Lord Cavendish, for responding to our pleas in this direction. I should also like to say that I entirely agree with him that we must proceed rather cautiously. We need to accept—and I believe that we do—the value-added concept as our method of measuring efficiency. Those of us who have had any experience in such matters, know full well that that is not at all easy to do in practice.

I am delighted to discover that the Government realise that this is the correct way forward; that is, if we can only move forward. I am also delighted to hear that they will, for their part, look again at the matter to see whether the drafting can be improved in time for Third Reading. I can only say that we on this side of the House will also look at it again in a most careful way to see whether we can make any helpful suggestions.

Taking the longer view, I think that those of us on this side of the House would be committed to publishing such information at such time as we are convinced that it is the right information. I doubt whether the Government would disagree with that position. But my broad point in this respect is to be supportive.

On Question, amendment agreed to.

Lord Morris of Castle Morris

moved Amendment No. 114A: Page 37, line 1, leave out ("after") and insert ("immediately upon").

The noble Lord said: My Lords, in moving the amendment, I am asking for clarification, pacification and reassurance. As it stands, Clause 48(1) (c) could be read as entitling the Secretary of State to ask for, and requiring the governing body to provide, information about the careers of any student from graduation to the grave; from his degree to his demise.

Every responsible education institution takes an interest in the careers of its students after they leave. But it is unrealistic and unreasonable to expect institutions to collect and provide for the publication of information about the eternal ongoing careers of their former students. While it is sometimes possible for institutions to have records of the immediate destinations of their students, it would be an absolute bureaucratic nightmare if they were expected to record details of the careers of students after that immediate period. The amendment seeks to define that the careers information which institutions are required to provide can only extend to such information as immediate destination or first employment where known. I beg to move.

Earl Russell

My Lords, I imagine that the amendment before the House enjoys the support of every departmental secretary in the country; it certainly enjoys mine.

Lord Renfrew of Kaimsthorn

My Lords, I should like to speak to the sense of the amendment. In Committee, I felt able to oppose an amendment put forward by the other side of the House which seemed to give rise to a number of bureaucratic requirements and necessitate far more paperwork than was productive. I am sure that it is the Government's intention in this context —that is, in such reports—that sufficient information should be conveyed and not a great deal more. I imagine that what is required is essentially "leaving" information, as the noble Lord, Lord Morris of Castle Morris, suggested.

The wording of the Bill may be open to various interpretations. But when it refers to, the careers of their students after completing any course or leaving the institution", certainly the notion of the word "career" by any dictionary definition implies trajectory. It has a point of beginning that may be birth or, in this case, it is after completing any course or leaving an institution. But what is the terminus? The noble Lord, Lord Morris of Castle Morris, said that it may indeed be the demise or the decease of the student. Clearly some earlier terminus is intended here, but it is not defined in the Bill. It could be six months or one year. Indeed, someone may change their employment very rapidly. It may be interesting to know that.

It is possible that the precise wording in the proposed amendment is not the only wording which could be followed. But I am confident that the Government do not require institutions to keep and publish an elaborate record of the entire career of each of its graduating pupils. I am also confident that my noble friend will be able to give us that assurance and perhaps set our minds at rest.

Lord Cavendish of Furness

My Lords, the amendment would have the effect of limiting the information which the Secretary of State may require the governing body of an institution to publish about the subsequent careers of students. The Secretary of State's power would only extend to information about careers immediately upon completing a course or leaving the institution.

I understand, and sympathise with, the concerns which have been expressed by the noble Lord, Lord Morris of Castle Morris, and other noble Lords that we should avoid putting an excessive burden on further education institutions. I hope that I will be able to give some reassurance on the matter. I ask the noble Lord, Lord Morris of Castle Morris, to recognise the fact that there will inevitably be a significant number of students who, immediately on leaving the institution, will not have taken up employment; indeed, some will have gone on holiday. The limitation imposed by the amendment would therefore make it more difficult to produce information about the next steps in the careers of students which is of use to other students, parents, employers and the wider community.

We would wish to leave open the possibility of a requirement to provide information about careers which reflects the decisions students have made once they have been away from the college for a period. Clearly, the regulations to be made under this clause will need to strike a careful and sensible balance between the need to obtain useful information on the one hand, and the need to ensure that the exercise is manageable for colleges on the other. It is certainly not our intention that colleges should be required to keep track of students over a long period of time.

I am grateful for the contributions that have been made. I hope that the reassurance I have given covers the points which were raised, otherwise I should feel inclined perhaps to look again at the matter and write to noble Lords. However, I hope that the noble Lord, Lord Morris of Castle Morris, is satisfied with my response and that he will feel able to withdraw the amendment.

Lord Morris of Castle Morris

My Lords, 1 am grateful to the Minister for that reply. Indeed, I am reassured; I am pacified; and my mind is clear and serene. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9 p.m.

Clause 49 [Publication of proposals]:

Baroness Blackstone

moved Amendment No. 115: Page 37, line 28, leave out ("and").

The noble Baroness said: My Lords, I shall speak also to Amendment No. 116. The purpose of the amendments is to place on the funding councils a duty to consult LEAs before going ahead with a proposal to open or close a college. A similar amendment was considered in Committee. Decisions to establish or dissolve an FE funding corporation will have a major impact on local authority provision in the area where a corporation is to be closed or established. That will apply to the authorities' schools and to the further and adult education activities that remain within their responsibility.

The amendment was resisted by the Government on the basis that many institutions and organisations would have an interest in the effects of such proposals and all would have an equal opportunity to be aware of them and make comment as a result of the general duty to publish proposals. The Minister did not consider a special statutory procedure should be accorded to LEAs. While of course it is true that a number of other bodies could be affected in any particular case where it is proposed to set up or close a corporation, the LEA is the only one of those bodies that will be inevitably affected. Local authorities seem to me to be different from all other bodies that might have an interest in so far as they have a broadly defined statutory responsibility that exists side by side with that given to the funding councils.

Clause 11 makes it clear that those duties wrap around the responsibilities of the funding councils. The Bill thus gives LEAs a certain statutory prestige. It is therefore right and proper that the Bill should be consistent in providing for proper consultation between funding councils and local authorities on matters that touch upon them both in the exercise of their respective duties.

In addition, another point puzzles us on this side of the House. Clause 5 of the equivalent Bill for Scotland includes a requirement to consult the education authority in the event of the Secretary of State proposing to open, close or merge colleges. It is unclear to us why Scotland should be treated differently from England and Wales. Perhaps the Minister will explain why there is a difference between the two Bills in that respect. I beg to move.

Lord Belstead

My Lords, I do not dissent in any way from the principle of consultation which underlies the amendments. I fully accept the need for local consultation on proposals to open or close local colleges. For the reasons I gave in Committee, however, in responding to almost identical amendments moved by the noble Baroness, Lady David, the Government believe that the clause as drafted already provides adequately for consultation to take place, not just with LEAs but with other local interests as well.

Clause 49(2) (a) provides that their proposals must be published and Clause 49(2) (b) provides that the funding council must consider any representations. I take the point, although with respect I do not wholly agree with it, that the LEA is primarily interested in these matters. If the noble Baroness had said that the LEA was vitally interested in these matters, I would agree, because the opening or closure of a college, as of any other educational institution, is a matter of vital interest to the LEA; but, my goodness me, it is also of vital interest to wide sectors of the population.

I am not saying this merely as a matter of rote, but I believe that the provisions which are to be found in Clause 49(2) (a) and (b) for publication and representation are as clear as could possibly be wanted and are the same as found in other education legislation. I hope that the noble Baroness will therefore forgive me if I resist the amendment.

Baroness Blackstone

My Lords, before the Minister sits down, will he answer my point on the difference between this Bill, which relates to England and Wales, and the Scottish Bill?

Lord Belstead

My Lords, I am sorry, I am afraid that I do not know the answer to that question. Perhaps it is the exception which proves the invariable rule.

Baroness Blackstone

My Lords, I should be grateful to have an answer to that question at some point.

Lord Belstead

My Lords, if the House will allow me, I shall write to the noble Baroness and place a copy of the letter in the Library so that other noble Lords can see the answer.

Baroness Blackstone

My Lords, I am grateful to the Minister for his reply. I thank him very much. I am afraid that I do not feel altogether satisfied with what he said about local authorities. Of course it is correct that many other parties will have an interest in a college being opened or closed, but the LEAs, as I have said, have a statutory responsibility for providing education for the same age group, albeit in a different form in schools, and their position is somewhat different. However, at this time of night I do not intend to divide the House on the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 116 not moved.]

Clause 52 [Duty to give information to the funding councils]:

Baroness Blackstone

moved Amendment No. 117: Page 38, line 30, at beginning insert ("(1) As specified in subsections (2) and (3) below"). The noble Baroness said: My Lords, I shall speak also to Amendments Nos. 118, 119 and 121. The purpose of the amendments is to create a duty for the further education funding councils and their institutions and committees to provide information to LEAs in parallel to their duty to acquire information. Again, the amendment was discussed in Committee. The basic arguments in its favour are straightforward and need to be repeated.

Since LEAs will continue to be involved in the provision of some further education, it is surely important that they should have the same statutory rights to receive information as the funding councils and their institutions. The amendment was resisted by the Government on the grounds that it was not needed, but I believe that the Minister conceded that local authorities have an equal need for the information. However, I think that he felt that they would be able to obtain it because of their "well-established working networks", whereas the funding councils needed the legislative power to ensure that they were able to obtain the information quickly.

That reply seems to be somewhat disingenuous: local authorities can currently obtain the information that they need because the institutions that provide further education are at the moment almost exclusively under their direct control. They are the funding bodies and the Education Reform Act gives them the exclusive power to require governing bodies to provide such information.

The removal of the further education colleges from the control of local education authorities and the repeal of those sections of the 1988 Act will fundamentally alter that relationship. Without some additional statutory powers which are put forward in the amendment, local authorities will not be guaranteed the information they require to carry out their statutory duties. Once again this Bill will be inconsistent if the powers given to local authorities are not consistent with the duties imposed upon them. I beg to move.

Lord Cavendish of Furness

My Lords, in replying to this group of amendments perhaps it would help your Lordships and especially the noble Baroness, Lady David, who is not in her place, and the right reverend Prelate, if I say that if and when Amendment No. 123 is discussed, I shall be giving an identical answer and deploying identical arguments. I shall leave it at that for the moment and see whether the matter needs to be addressed later.

Clause 52 imposes a requirement on the bodies listed to give the further education funding councils such information as they may need for the purposes of the exercise of their functions under Part I of the Bill. This amendment would impose a requirement on the councils and on certain other bodies to provide local education authorities with such information as they may need to exercise their functions under this part of the Bill.

Despite what the noble Baroness said about the need for a parallel duty, we do not believe that this is necessary. Local education authorities, colleges and many other further education organisations have been working closely together in a spirit of co-operation for many years now and they have established their information networks.

Further education funding councils, however, will be new bodies on the further education scene, and will not have had time to build up the contacts they need to obtain information in order to carry out their functions as effectively as possible. The councils will have to get to grips with their new duties very quickly, and that is why we are introducing a legal requirement that certain bodies supply them with the information they need to carry out their functions.

We recognise that there will need to be a particularly close relationship between the councils and LEAs where colleges in the new sector make provision for the further education of adults which falls to the duty of the local education authority. However, we would expect LEAs and colleges to have been involved in contracting for this provision, and therefore to be able to obtain information about it without the need for a statutory requirement on the councils to provide it.

I am conscious that these are the same arguments as have been rehearsed before, but that is the Government's view. On that basis, I hope that the noble Baroness will withdraw her amendment.

Baroness Blackstone

My Lords, I regret that I seem unable to persuade the Government that this is a helpful amendment, designed to increase co-operation between funding councils and local authorities. It seems to us on this side of the House that we should be even-handed on the exchange of information. I fear that one of the Government's problems is their deep-seated prejudice against local authorities and their unwillingness to legislate in a way that will help the authorities to carry out their statutory duties. However, again I have no intention of dividing the House on the matter and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 118 and 119 not moved.]

Lord Cavendish of Furness

moved Amendment No. 120: Page 38, line 34, after ("any") insert ("institution maintained by a local education authority"). The noble Lord said: My Lords, on behalf of my noble friend I beg to move Amendment No. 120. Clause 52 lays a requirement on a number of bodies to give the further education funding councils such information as they may need for the exercise of their duties. This amendment includes among the listed bodies the governing body of any institution maintained by a local education authority. It will clearly be necessary for the councils to have the power to obtain information from such institutions to enable them to carry out their duties. I commend the amendment to the House.

Baroness Blackstone

My Lords, I am a little concerned about this amendment. As I understand it, it gives the funding councils the right to demand information directly from local authority maintained schools and for that matter from adult education institutions, rather than via the local authority.

The amendment does not specify the type of information that can be demanded, nor is there any limitation on the demands that could be made under the provision. The problem about the amendment is that it could impose quite unnecessary burdens on the schools to provide directly to the funding councils information which they have already submitted to their maintaining local authority. As well as imposing an unnecessary burden of work on schools and their governing bodies, it could possibly also undermine the relationship between the authority and the institutions it maintains and make it rather more difficult for the local authority to negotiate sensibly with the funding council over the exercise of their respective powers and duties under this legislation. I hope the Minister can respond to those difficulties.

Lord Cavendish of Furness

My Lords, the noble Baroness has advanced two or three objections to this amendment. 1 hope may reconsider this matter and write to the noble Baroness. To save the time of the House, perhaps the best way forward is to accept the amendment on the understanding that I shall be pleased to give full consideration to the points raised.

9.15 p.m.

Baroness Blackstone

My Lords, with the leave of the House, I am grateful for that reply. I look forward to hearing further details of what is intended on this issue and whether there are somewhat better ways of achieving the aims and objectives of the amendment.

On Question, amendment agreed to.

[Amendment No. 121 not moved.]

Lord Belstead

moved Amendment No. 122: After Clause 52, insert the following new clause: Inspection etc. of local education authority institutions, other than schools, and advice to Secretary of State (".—(1) The chief inspector shall have the general duty of keeping the Secretary of State informed about—

1. (a) the quality of education provided in local education authority institutions,
2. (b) the educational standards achieved in such institutions, and
3. (c) whether the financial resources made available to such institutions are managed efficiently.

(2) When asked to do so by the Secretary of State, the chief inspector shall—

1. (a) give advice to the Secretary of State on such matters relating to local education authority institutions, and on such other matters relating to further education, as may be specified in the Secretary of State's request, and
2. (b) inspect and report on any such local education authority institution, or any such class of local education authority institution, as may be so specified.

(3) In connection with the duties imposed on the chief inspector under this section, his powers, and those of his inspectors, in relation to the inspection of schools under any enactment shall extend to the inspection of institutions under this section. (4) In relation to any local education authority institution maintained or assisted by them, a local education authority—

1. (a) shall keep under review the quality of education provided, the educational standards achieved and whether the financial resources made available are managed efficiently, and
2. (b) may cause an inspection to be made by persons authorised by them.

(5) A local education authority shall not authorise any person to inspect any institution under this section unless they are satisfied that he is suitably qualified to do so. (6) A person who wilfully obstructs any person authorised to inspect an institution under or by virtue of this section in the exercise of his functions shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.— (7) In this section—

1. (a) in relation to institutions in England, "chief inspector" means Her Majesty's Chief Inspector of Schools in England and "his inspectors" means Her Majesty's Inspectors of Schools in England,
2. (b) in relation to institutions in Wales, "chief inspector" means Her Majesty's Chief Inspector of Schools in Wales and "his inspectors" means Her Majesty's Inspectors of Schools in Wales, and
3. (c) "local education authority institution" means an educational institution, other than a school, maintained or assisted by a local education authority.").

The noble Lord said: My Lords, we have already discussed quality assessment arrangements to be made by the new further education funding councils. The clause completes the picture on quality assessment in further education. It could not be brought forward earlier because it necessarily follows closely the terminology of the Education (Schools) Bill, which is currently under consideration in another place.

Further education institutions within the new further education sector will be assessed under arrangements made by the further education funding councils under Clause 9. Further education provided in schools will be inspected under the Education (Schools) Bill. This leaves educational institutions maintained or assisted by local education authorities, other than schools, which are the subject of this new clause. They include, in particular, adult education institutes.

This clause gives the new office of Her Majesty's Chief Inspector the same powers of inspection in relation to these institutions as he will have, under the Education (Schools) Bill, in relation to schools. It also gives him, in respect of such institutions, the general duty set out in the parallel provision of the schools Bill; namely, a duty to keep the Secretary of State informed about the quality of education provided, the educational standards achieved and whether the financial resources made available to these institutions are managed efficiently.

The clause also enables the Secretary of State to seek advice from Her Majesty's Chief Inspector on any other matters relating to further education. This would enable the Secretary of State to seek advice in the event of a complaint, for example, about the adequacy of the provision made or proposed to be made by the funding council for a student with learning difficulties.

Finally, the clause deals with local education authorities' continuing powers of inspection of these institutions; namely, educational institutions other than schools which they maintain or assist. The Government do not propose to set up a system of registration of inspectors for the purpose on the lines of that proposed in the schools Bill. Nonetheless, in recognition of the importance of ensuring that inspectors are qualified for the purpose, the clause provides that inspection is to be carried out by persons appointed by the LEAs who are suitably qualified. It only remains for me to apologise, for the reasons I have given, that this clause could not be included in the original Bill. I beg to move.

Baroness Blackstone

My Lords, the new clause is helpful in that it makes clear the duties of Her Majesty's Inspectorate and local authorities with regard to quality in LEA institutions. Those duties are expressly set out and provided for. I thank the Government for introducing this new clause. There are, however, a couple of points I wish to raise.

First, the funding councils have wide powers to fund activities outside their own sector, but the activities of their quality assessment committee are to be restricted to the further education sector. While the amendment deals with local education authority provision, there is potential for much activity to go uninspected that is neither under the remit of LEAs or the new further education sector. I refer, for example, to the work of the further education staff college. I presume that will be funded by the further education funding councils. That work is currently supervised by the local authority associations. However, they will probably cease to be the main funding agency under the new arrangements.

The second issue I wish to raise relates to the schools Bill, which is currently in Committee in another place. That Bill expressly repeals Section 77 of the 1944 Education Act and removes the powers of LEAs to inspect schools. Local authority associations are currently in correspondence with Ministers over the implications of that repeal. I believe Ministers are saying local authorities will retain sufficient general powers to fulfil their overall duty to secure the national curriculum and the quality of education within maintained institutions.

However, I must inform the House that the view of the local authority associations and their professional advisers is that the repeal of Section 77 would severely undermine the local authorities' ability to fulfil their statutory duties. The inclusion of the new clause in the Bill tends to reinforce the argument that general powers will not be adequate. Again, perhaps the Minister would care to comment.

Lord Belstead

My Lords, I am grateful to the noble Baroness for her general welcome to the new clause. First, the powers that I described in my opening remarks do not extend beyond the boundaries that I outlined. Secondly, no decision has yet been taken on future arrangements for the further education staff college. As the noble Baroness correctly said, that is currently funded by the local education authorities. Thirdly, I shall have to write to the noble Baroness on the point that she made about the schools Bill removing the powers of local education authorities as regards inspection of schools. Perhaps I may be forgiven for that as it is in a different piece of legislation, but I undertake to write to the noble Baroness.

On Question, amendment agreed to.

[Amendment No. 123 not moved.]

Clause 53 [Directions]:

Lord Kilmarnock

moved Amendment No. 123A: Page 38, line 40, at beginning insert ("Subject to subsection (3) below"). The noble Lord said: My Lords, as has been said on a number of occasions, Clauses 7 and 53 are the counterparts in Part I of the Bill of Clauses 64 and 77 in Part II. I would have tabled an amendment to Clause 7, but unfortunately I was abroad and did not return in time to table anything for the first day of Report stage. However, these amendments to Clause 53 only will serve me just as well for my main purpose, which is to probe the Government on the degree of intervention that they plan to exercise in the FE and sixth form college sector.

As a result of the debate in Committee—I believe that it was the last day of the Committee stage—on Clauses 64 and 77, the noble Lord, Lord Belstead, offered to come forward with government amendments in an attempt to satisfy his university critics. He has done that in the shape of Amendments Nos. 145, 170 and 171, which will be debated although not this evening. When I asked whether he would bring forward similar amendments for the further education part of the Bill, he told me on 16th December that he would discuss the matter with his right honourable friend. As I am sure he must have fulfilled that undertaking, the result can only have been negative as no such amendments to Part I have appeared. I have accordingly taken the liberty of applying the Government's own formula for Clause 77, slightly modified, to Clause 53 as a means of returning to this matter.

On Second Reading I pointed out that the White Paper, Education and Training for the 21st Century, endorses what one might almost call a Robbins-type approach to further education, saying that: The council's main responsibilities will lie in securing enough provision for further education, ensuring that suitable full-time courses are available for all young people who want them. That suggested, I think correctly, that further education would be demand led. In post-compulsory education the applicants, armed with careers guidance and market information, must be the people best qualified to decide which courses they want to follow.

However, the Bill follows a rather different course. In apparent contradiction to the White Paper, the Secretary of State arms himself with what are in effect extensive manpower planning powers. Those are strongly entrenched in Clause 7, to which I have referred, and in Clause 53. In Clause 53, he has a power of direction, in respect of activities carried on by any particular institution. Presumably that means that he can instruct the council to withhold funds from courses of which the Government do not approve or to steer them toward those which, in their wisdom, they believe to be more useful. That does not seem to me to be sensible. As I said before we are in a post-compulsory market in which students should make up their own minds about their careers. Those institutions will flourish which meet their demands and not the Government's directions. As the Government have not come up with any amendment to limit their present unnecessary powers in the Bill, I have taken the liberty of doing it for them.

There is another aspect to this matter on which I should be grateful for clarification. It relates to training credits. They are mentioned in the White Paper, on page 26 at paragraph 6.2 as one of the sources of income of the further education sector. I understand that they are to be awarded through the TECs. A House of Commons research note states: Some will offer credits to all 16 and 17 year old school leavers in the area. Others will offer them on a selective basis (e.g. for apprentice or technician level training only). If that is correct, it appears to me that funds provided by training credits to FE colleges will be subject to local agreements between the TECs and the FE colleges. Can the Government say what proportion of the income of the further education sector is expected to come from that source? If the plan is to respond to local labour market needs, is it not even more inappropriate for the Secretary of State to reserve to himself a power of direction where local signals are much more appropriate? I go even further and suggest that students themselves should be given the benefit of the labour market information in their careers advice, enabling them to make up their own minds rather than have the choice of courses dictated by either the TECs or the Government.

However that may be, I am clear that the whole point of transferring power to independent corporations fuelled by a funding council would be lost if the Government were constantly to be sticking in their oar in the interests of notional manpower planning objectives. I am aware that there is some difference between the higher education sector with its academic and research requirements and the further education sector with its more directly vocational orientation. Even so, I do not believe that the latter will flourish if constantly prodded and harried to produce this that or other skills which will probably be outmoded by the time they come on stream.

On those grounds I believe that the principle of non-interference, except in the case of gross mismanagement or abuse of the system—for which the Government already have powers under Clause 7 as it stands—should apply just as much to further education as to higher education. I beg to move.

Lord Campbell of Alloway

My Lords, I oppose these amendments. Amendments Nos. 123A and 123B are in identical terms to the amendments to Clause 77, Amendments Nos. 170 and 171, tabled in the name of my noble friend Lord Belstead.

I oppose Amendments Nos. 123A and 123B and in principle support Amendment No. 124 in the name of the noble Baroness, Lady Blackstone, which proposes to leave out Clause 53. Unless Clause 53 were substantially amended along the lines of Amendment No. 169B, standing in the names of the noble Lord, Lord Renfrew of Kaimsthorn, the noble Baroness, Lady Young, and myself, there would be no way that it would be appropriate for Clause 53 to stand at all.

It will be seen that Clause 53 as amended by Amendments Nos. 123A and 123B and Clause 77 as amended by Amendments Nos. 170 and 171 would not be acceptable. Such clauses, as amended, confer far greater powers on the Secretary of State than have ever been conferred previously. Apart from there being no precedent in the statute book for any such grant of power, there is the matter of whether it is necessary. The first question that arises—it will arise also when I seek to support the amendment in the name of the noble Baroness, Lady Blackstone, as I have said I shall do—is whether there is any need for Clause 53 having regard to the provisions of Section 219(2) and (3) of the 1988 Act which extends the provisions of Sections 68 and 99 of the 1944 Act to institutions maintained by an LEA which provides higher or further education or both. If one adds Amendment No. 169C and transposes it to Clause 53, and if it were accepted, could there be any need for Clause 53?

We shall not know the position until Monday. In my submission there would and could be no such need if Amendment No. 169C were accepted by your Lordships either in respect of Clause 53 or Clause 77. The Motion that Clause 53 do not stand part was not moved. The Motion that Clause 77 do not stand part was withdrawn at Committee stage at the suggestion of the Minister so that he could consider his position. Amendments Nos. 170 and 171 to Clause 77 proposed by the Minister to meet the argument adduced at Committee stage, although tabled in good faith, assuredly do not meet the full thrust of the argument and are therefore, with respect to my noble friend, entirely unacceptable.

The next question that arises is whether Clause 53 and its sister clause, Clause 77, as implemented by Clause 64—again for which there is no precedent—could be acceptable to your Lordships' House as an absolute unfettered derogation of power to the Executive, so to speak, to rule by decree. The answer again is assuredly, no. No amendment has been tabled to Clause 53 which will be acceptable. It has certainly not been tabled by the Government.

One moves then to the third question which is whether Clause 53 should stand, albeit substantially amended along the lines of Amendment No. 169C, and albeit perhaps with modifications to suit Clause 53. However, until the position as regards Clause 77 has been considered and one hopes resolved by your Lordships on Monday, it is not easy to resolve the issue as to whether Amendments Nos. 123A and 123B should be taken to amend the clause or whether Amendment No. 124 to Clause 53 should be considered today (in the sense of being divided upon) or whether Clause 53 should be left out. In a sense the two clauses are sister clauses. The same basic considerations, albeit with modifications, apply to both.

The position on Clause 77 will not be known until after the debate on Monday. If that is right, a consistent alignment may well have to await Third Reading and could not be resolved by a Division on Clause 53 today. That is a matter for your Lordships' House.

It is absolutely plain from Amendments Nos. 169A to 169C that it was impossible to accept that Clauses 53 or 77 should form part of this Bill. Indeed, I said in Committee that the powers of direction sought under the conglomerate powers—that is, Clauses 53, 64 and 77—were far more extensive than those conferred by the 1988 Act. They were in effect an overkill and never ought to appear in any statute.

The final point of considerable importance is that the position under the 1988 Act to which the noble and learned Lord the Lord Chancellor then referred is not the same as would obtain under Clauses 53, 64 and 77 of this Bill. In particular, the essential safeguard of Clause 124(7) of the Act has been removed from this Bill. Clause 64(2) (a) of the Bill also constitutes a substantial departure. Therefore, as I pointed out in Committee, it cannot be said, as my noble friend Lord Belstead said on two occasions, that Clauses 53 and 77 merely restate the law as accepted by Parliament in the passage of the 1988 Act. Assuredly they do not.

Earl Russell

My Lords, I agree entirely with the general statement of the position put forward by the noble Lord, Lord Campbell of Alloway. I have read carefully the debates that we had in Committee, in particular the contribution made by the Minister. The noble Lord, Lord Kilmarnock, tabled an amendment in Committee to make any special directions under Clause 53 subject to affirmative resolution. The Minister replied that that would have the effect of making the resulting instrument hybrid, and that would give rise to a long and complicated technical procedure involving the right to be heard by counsel and a great deal more. That would of course be inconvenient from the Executive's point of view.

I am also well aware that, being a sovereign body, Parliament possesses the power to waive the hybridity provisions on any particular occasion. I recall an occasion at the very fag end of the Committee stage of the Local Government Finance Bill when we passed such a provision for the assessment of railway signal boxes. I remember then asking the noble Lord, Lord Hesketh, who was in charge of the Bill, for a promise not to make a habit of that, which he freely gave.

That power exists but I am a little doubtful about whether it should be used. I believe that the restrictions on the hybrid Bill exist for a very good reason. They have existed since 1626 and probably longer. The point of the restrictions on hybrid Bills is that it should not be possible, as it used to be in the traditional bills of attainder in the old days, to use the whole power of the legislative juggernaut to crush a single individual. One person or institution facing the panoply of an Act of Parliament arrayed against him ought to have the right to be heard by his counsel. That is one of our liberties and it is an important one. Therefore, I should view with a great deal of misgiving any restriction of the procedure on hybrid Bills. Of course that procedure on hybridity and the great care with which it has been built up and the thought which has gone into constructing it illustrates clearly why some of us believe that the powers which the Government are claiming in Clauses 53, 64 and 77 to give directives to an individual institution are an abuse of executive power and the legislative process.

The power which the Government are claiming is very much the same as the kind of power which Parliament in its wisdom has always wished to restrict and fetter by the use of the hybrid procedure. An institution subject to a ministerial directive with the force of law behind it stands in need of exactly the same protection for its legal rights as an institution subject to an affirmative instrument directed to an individual institution. The legal needs of the institution in one case are the same as in the other. Therefore, morally the right to legal protection should be the same in one case as it is in the other.

In fact, by saying that an affirmative instrument under this clause would be hybrid, the Minister was confessing that whatever is the legal position—and although I have been taking advice on that, so far I have not yet received a resolution on it—this clause, even if it is not legally hybrid, is morally hybrid. That is why it should not remain in the Bill. I ask the Minister whether the Government have taken advice before introducing this Bill on whether the power to give special directives renders it hybrid, in which case we shall be with it for a very long time.

Lord Belstead

My Lords, the amendments in the name of the noble Lord, Lord Kilmarnock, are identical to the amendments which the Government have tabled to the parallel clause in Part II of the Bill, Clause 77. I can well understand noble Lords wondering why the Government have not tabled the same amendments to Clause 53.

I emphasise that the Government greatly respect the achievements of many of the colleges which will transfer to the new further education sector. Indeed, the fact that we are giving the colleges independence is evidence of our confidence in their ability to manage their own affairs.

However, it is quite a big step from there for the Government to say that we have the confidence to limit our long stop powers to intervene in the event of something going very wrong with one of the colleges and the funding council accounting officer failing to fulfil his responsibilities. For that would be the effect of these amendments. They would impose very important constraints. They provide that the Secretary of State may not frame directions by reference to particular courses of study. That includes an institution's ability to offer particular courses or programmes. It applies to their content and it covers the way in which they are taught, supervised and assessed. Those are all objectives which I undertook to bring to the House as regards Clauses 64 and 77 but not as regards this clause. In the case of higher education, where most of the institutions are of long standing, the Government feel confident in limiting their power to give directions in the way I have just described.

In further education, however, it is a fact that, successful as they have been, many of the colleges are not long-standing and do not have a track record which can compare with that of our historic universities. The Government do not feel, therefore, that they should limit their power in the way proposed by these amendments.

That is not to say that the Government expect to have to intervene in these areas, except as a last resort in the event of things going badly wrong. The main purpose of Clause 53 is to provide a long stop power to protect the taxpayers' interests in the sum of some £2 billion that is spent on further education every year. The power of direction-making is needed to protect against the remote possibility of what I have described on a previous occasion as a nightmare scenario where the funding council has not taken the necessary action and the Secretary of State needs to give a direction. It is most likely that what I have in mind would involve an institution getting into financial difficulties. However there may be other problems as well.

It is for those reasons that I urge the noble Lord, Lord Kilmarnock, to withdraw the amendment. But first perhaps I may make two points. The noble Earl, Lord Russell, asked the direct question of whether legal advice was given by the department that Clauses 53 and 77 render the Bill hybrid. It will not entirely surprise the noble Earl when I answer that question by saying that we have not received any advice that there is any hybridity rendered to the Bill by those clauses.

9.45 p.m.

Earl Russell

My Lords, perhaps I may ask the Minister to elaborate on that a little further. I appreciate that he has not received advice that the Bill is hybrid. Has he received advice that it is not?

Lord Belstead

My Lords, if the noble Earl will forgive me, I do not wish to add to what I have said. The other point I wish to make is that in reply to the speech of my noble friend Lord Campbell of Alloway, I followed carefully what he said. I agree, with regard to the mechanisms of his speech, with what he said. I hope that he will forgive me when I say that I did not agree with his evaluation of the merits of the amendments to Clause 77. However, my noble friend staked out a position of the way in which he felt the House should proceed. If the House proceeds like that by not reaching a decision on Clause 53 this evening and seeing what we do on Clause 77, I shall certainly not cavil.

Lord Campbell of Alloway

My Lords, before the noble Lord sits down, perhaps I can ask him a straight question. Has he any knowledge of any precedent of what he calls a "long-stop provision", which is in this form and which is wholly unspecific as to the type of situation in which it will be used? Has he any knowledge that that has ever been asked of any Act of Parliament even in emergency or war time?

Lord Belstead

My Lords, my answer is that I have not. However, I remind my noble friend that when introducing the Bill on Second Reading, I reminded the House in the context of Clause 77 that no less a Member of your Lordships' House than the noble and learned Lord the Lord Chancellor made the point that under Clause 77 we were talking about an extreme situation—I realise that we are now on Clause 53. It was a situation where directions would only be given in an extreme situation. For instance, in the way I put it under Clause 53, where the funding council has not taken the necessary action and the Secretary of State feels that there is need for direction. I could have been more downright than that and said that there may be a situation where relations between the funding council and the Secretary of State may break down in the context of a serious situation occurring with a specific college. We are talking of an extreme long-stop power. But the answer to my noble friend is no.

Perhaps before I sit down I can apologise to the noble Lord, Lord Kilmarnock. With regard to training credits I cannot give a precise sum but it will cover part-time students only. The income will account for a relatively small proportion of a college's overall income compared to the college's core funding.

Lord Tordoff

My Lords, before the noble Lord sits down, I wonder whether he will undertake to examine the hybridity case put forward by my noble friend and perhaps agree to write to him about it.

Lord Belstead

My Lords, I do not wish to be unreasonable or unhelpful. I do not think that I can help. I shall look to see whether I can be more helpful than I have been. But my answer is as clear as it can possibly be. The legal advice that I received is that Clauses 53 and 77 do not render the Bill hybrid.

Lord Kilmarnock

My Lords, I am grateful to those noble Lords who have spoken on this matter. I agreed with a good deal of what the noble Lord, Lord Campbell of Alloway, said, especially when he said that Clauses 53, 64 and 77 are overkill. He went on to say that we shall not know the position until Monday, when the result of the debates on the Government amendments to Clauses 64 and 77 are declared.

The noble Lord, Lord Belstead, has indicated that the Government do not intend to treat the two sectors on all fours or on a level basis. In his reply the noble Lord said that the Government needed this power in case something went very wrong—the accounting procedures got out of hand or something of that nature. However, as I understand it, that is not what this clause addresses. I believe that the Government already have that power in Clause 7. We are talking here about directions on matters of an educational and not a managerial nature.

The noble Lord also said that the Government felt more inclined to trust the higher education institutions because of their long-standing track record and that some of the colleges would have a very small or no track record. That is questionable. Further education in this country has a proud record. There are some institutions which have been in existence for a very long time. Therefore, I am not sure that the noble Lord's point entirely holds water.

On many occasions during debates on this Bill he has said that the Government do not expect to have to intervene; they simply regard these clauses as an extreme longstop power which they require in order to protect the expenditure of £2 billion of public money. I am grateful to the noble Lord for his reply which was as courteous and as well phrased as we always expect from him. However, he took no account of my points on the desirability of local judgment being best on what courses should be offered. Neither did the noble Lord deny my suggestion that the Government wanted manpower planning powers up their sleeve, which is in effect what these measures are. That does not provide a route to healthy pluralism in this sector which is what I am sure we want. It is a very exciting sector and it can be developed very well indeed. It does not need the Government's long arm to plunge into the academic or training pot.

I am not entirely satisfied with what the noble Lord has said. The noble Lord, Lord Campbell of Alloway, is right. We shall have further debates on a closely related topic on Monday and we shall see how we come out of that. Depending on the results of the debates on Monday, it will be my duty to return with these matters at Third Reading. I shall seek some kind of diminution of the Government's power in the further education sector, but possibly not as extensive as that in the higher education sector. That is a necessity.

On those grounds I shall not press the amendment this evening. I am pleased in that I believe I have succeeded in my objective, which was to get a debate going and to find out the Government's view. I shall await events and reserve the right, which I believe I still have, to return to the matter at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 123B not moved.]

Baroness Blackstone

moved Amendment No. 124: Leave out Clause 53. The noble Baroness said: My Lords, we have had something of a rehearsal of the merits and demerits of this clause in the debate which we have just had concerning the amendments of the noble Lord, Lord Kilmarnock. I wish to oppose the inclusion of this clause in the Bill. It is an unnecessary power which allows the Secretary of State to interfere in an unprecedented way in the work of the funding councils and in the activities of individual educational institutions. Under the democratic traditions of this country we have in the past favoured pluralism. We have favoured giving as much autonomy as possible to public bodies consistent with proper accountability as regards public funds. We have opposed Government by diktat from the centre, and we have always worked hard to constrain the powers of Ministers in the interests of devolving responsibility to those directly concerned with the running of public institutions.

We had a long debate in Committee on Clauses 64 and 67 of the Bill. Clause 53, as the noble Lord, Lord Campbell of Alloway, has already said, has exactly the same effect with respect to the further education funding councils and the institutions for which they are responsible, as Clause 77 has with respect to the higher education funding councils and the universities. There was anxiety on all sides of the House about the undesirability of Clause 77. I believe there were no speakers, apart from the Minister, who felt able to defend the inclusion of that clause in the Bill.

One of the important purposes of establishing funding councils is to establish an arm's length relationship between the Government and the education institutions responsible for providing tuition for students at various levels. Clause 53 destroys that arm's length principle and allows for a Secretary of State with malign intentions—I am not saying that the present Secretary of State has such intentions but there may be one who has such intentions in the future—to interfere in the content of courses and how they are taught.

There are Government amendments to Clause 77 which we shall debate on Monday, but unfortunately I do not believe that they meet the many anxieties that have been expressed. There are no such amendments with respect to Clause 53, yet the same problems arise.

Some members of your Lordships' House may wish to argue that the same issues in relation to academic freedom do not apply to further education. I beg to differ. There are many courses in further education of a quite advanced nature. Freedom of ideas is as essential in the teaching of such courses as it is in the universities. Further education colleges should be providing a broad and varied curriculum. In a free society the principle of academic freedom is indivisible. There is in any case no need for draconian powers of this kind.

In attempting to justify the inclusion of Clause 77, in Committee the Minister argued that the Secretary of State needed a power of last resort, or what he called a longstop power. In particular, he argued that the Secretary of State needed such a power if relations with the funding council were to break down and to provide protection for the tax payers' interests with respect to considerable sums of public money. He went on to refer to the possibility that either an institution or the funding council might go completely off the rails—a nightmare scenario, was the term he used.

Nightmares very occasionally actually happen, but not very often. The gothic quality of the Minister's imagination in conjuring up this nightmare suggests to me that he has slightly lost touch with reality. He has now just repeated this nonsense. Can we imagine a situation in which a publicly-appointed body of people, people of considerable knowledge and experience—I assume with an eminent and experienced chairman, and no doubt with a chief executive of considerable expertise—will go off the rails and do so at the same time as one or more institutions? I am sorry that the Minister has seen fit to repeat these far-fetched arguments with respect to Clause 53.

Since the chief executives of the funding councils are the accounting officers, they are under an obligation to ensure that public money is properly spent. The Secretary of State therefore has no need to have a last resort power to intervene in this way. Moreover, if the funding councils were to fail to carry out their responsibilities properly, the chairman and the members can be dismissed on the grounds of being unfit, and replaced by the Secretary of State with a new chairman and new members.

Clause 53 is not just unnecessary, it is also dangerous. It should be dropped from the Bill. I beg to move.

10 p.m.

Lord Campbell of Alloway

My Lords, I support the noble Baroness, Lady Blackstone, as I indicated a moment ago that I would do and as I stated in Committee that I should do. Although we are at completely disparate ends of the political spectrum I agree with every word she said and the way that she put it. It is interesting that that measure of agreement could come in your Lordships' House.

What on earth got into the Government to make them produce these so-called draconian powers? Why did they do it? I made some inquiries. I do not know whether what I have been told is right or wrong but they must have some reasons for doing it. It is unprecedented. It has never happened before either in peacetime or in wartime. What on earth is going on?

I am advised that the proposed conglomerate powers—in Clauses 53, 64 and 77—came about in this way. There was a decision of Mr. Justice Simon Brown on judicial review in which he made certain observations in his judgment. They were not part of the essential reasoning in the case. They were what we call obiter dicta, which as such do not stand as authority. They were to the effect that the way in which the Secretary of State understood the exercise of his powers under the 1988 Act in this context was erroneous. There was no appeal by the Secretary of State against the decision of Mr. Justice Simon Brown for the simple reason that the Secretary of State won. Noble Lords are laughing. This is no laughing matter. It is a most astonishing affair. I am advised that Clauses 53, 64 and 77 were drafted so as to seek to ensure that the way in which the Secretary of State understood he could exercise his powers was in fact rubber-stamped in this Bill by Parliament. If that analysis and advice are correct, it is astonishing.

I am also advised that the Secretary of State received legal advice to the effect that the 1988 Act was not drafted in such a way as to enable him to exercise the degree of power of control which he wished to exercise. It comes to much the same thing. There it is. I cannot say whether it is right; I cannot say whether it is wrong. I was not there. Perhaps that is just as well anyway. But there must be some reason. What is the reason? I support the noble Baroness.

Earl Russell

My Lords, I have listened carefully to what the Minister has said in justification of these powers. I take the Minister's point that he is talking about what he calls a nightmare scenario. But these are subjective phrases. One man's nightmare is another man's waking.

The phrase used was "if the funding council should go completely off the rails". In Committee, I said that the phrase, "completely off the rails" was not statutory language. Since that time, I have discovered that the phrase originates with Mr. Kenneth Baker. Whether that commends it to your Lordships is a question that I shall not pursue further. During the Recess, I was asked by the noble and learned Lord, Lord Simon of Glaisdale, to translate the phrase, "go completely off the rails" into statutory language. I came back with the reply, "failed to discharge his duties to the satisfaction of the Secretary of State".

I think that we have here the real trouble with the clause; namely, the purely subjective sense in which these powers will be used. They will be used to stop things which appear unreasonable to the Secretary of State. No doubt some things which appear unreasonable to the Secretary of State are unreasonable. Similarly, there is no doubting the fact that some things which appear perfectly reasonable to other people are in fact unreasonable. However, I do not think that a Parliament which is still told that it is its duty to control the Executive can assume a priori that the Secretary of State's judgment of what is reasonable should be taken entirely at face value and indeed should have the force of law.

In Committee, the Minister referred to institutions getting into financial difficulties. He said that there were three instances among universities. One which I will concede to the Minister was happenstance; the second was coincidence; and there might be those who think that the third was enemy action. We have here an issue where there are two strongly held views. I express no opinion and I think that the House should express no opinion on this occasion about which of them is right. But what I cannot see that the House can do is to endow one of these views with the force of law before it is even formed, and indeed before the issue upon which it is to be formed has even arisen. That seems to me to be an abuse of power.

It is my understanding that it is difficult to delete a clause from a Bill on Third Reading. If I am right, then this is in fact the last occasion upon which we can move to delete the clause from the legislation and ask the House to vote on it. However, if that is not the case, I am hugely relieved.

Lord Campbell of Alloway

My Lords, with the leave of the House and with respect as I see that the noble and learned Lord the Lord Chancellor is present in the Chamber, I question whether that is right.

Earl Russell

My Lords, if that is not right, I am glad to hear it. I do not wish to mislead the House. But at some stage or other before this clause leaves the House, I believe that we shall need to vote on it.

Lord Kilmarnock

My Lords, before the Minister replies, I should like to associate myself most strongly with the remark made by the noble Baroness, Lady Blackstone, that academic freedom is indivisible. She put it in a nutshell. Whatever is agreed on what I shall call in shorthand "the university end of the Bill", I can assure the noble Lord that it will not be acceptable if the further education sector is simply left out in the cold. I am relieved to hear from more expert opinion that this is not in fact the last occasion upon which we can consider the matter. We shall certainly do so when we reach the next stage of the Bill's proceedings.

Lord Renfrew of Kaimsthorn

My Lords, I shall certainly be happy if the noble Baroness is content to withdraw the amendment at this stage. Indeed, I hope that my noble friend the Minister will be able to give her some encouragement to do so. If we are talking about nightmare scenarios, it seems to me that it would behove the Secretary of State to be more specific about his nightmares. It is my appreciation of the matter that most of the Secretary of State's nightmares in the field of education are financial: his concerns are primarily that something may go wrong with the finances and he requires the power to intervene when something is clearly going wrong in that respect. In that case, it seems to me to be appropriate that he, or his advisers, should have drafted a clause which gives him the power to intervene when he has good reason for thinking that something is going wrong with the finances. If he or his advisers had framed a clause in that form, we should have had no difficulty in accepting it. It is the untrammelled licence of the Secretary of State's potential nightmares that gives us such anxiety.

Lord Peston

My Lords, before the Minister replies, there is a logical point missing: it is not merely that the nightmare has to include the failure of the individual institution plus the council; we must also assume the correctness of the Secretary of State. Given that choice, I see no reason to believe that the Secretary of State who claims to have the nightmare is, as it were, totally compos mentis. In other words, there is no reason to believe, given the choice—it is a logical problem here—that the DES, of which I had the great honour to be the main adviser for some time, would be right in such circumstances; and so I do not believe we can accept logically the nightmare argument.

Lord Belstead

My Lords, the noble Earl, Lord Russell, made some fairly harsh comments about the powers contained in the clause and referred to them as an abuse. He said that they are purely subjective. The first point that I should like to make is that the Secretary of State is ultimately responsible to Parliament and to the taxpayer for the Government's further education policy and the funds provided by Parliament which for the further education sector amount to some £2 billion a year. I say on behalf of the Government that it is inconceivable that my right honourable friend should not have available to him a long stop power of intervention to protect the taxpayer's interests in this considerable sum of money. With great respect, I have not this evening heard a considered view put forward as to whether my assertion on that point is right or wrong.

In debate in Committee it was argued that for the Secretary of State to hear about a situation in which a direction-making power was needed he would have to have been advised by the funding council. It was also suggested that it was unimaginable that relations between the Secretary of State and the funding council would have deteriorated to such a point that a direction-making power would be needed. Perhaps I may say a word about those two points.

First, perhaps I may stress that, as I explained in Committee, the power of direction-making is needed against the remote possibility of what I have, indeed, described as a nightmare scenario. If the power were to be needed, it would be in a situation in which normal relations had broken down.

How would the Secretary of State have come to hear of such a situation? His main source of advice would be his assessor on the funding council. I remind your Lordships that the value of the Secretary of State having an assessor on the council was recognised by your Lordships in discussion in Committee. It would in any case be likely that if, say, an institution were in such financial difficulties that the nightmare scenario was indeed in view, the news would have found its way into the press. Even if it had not, my right honourable friend might well have been informed by other institutions within the sector.

The noble Lord, Lord Peston, queried whether the Secretary of State might have summed up correctly as to whether a situation had reached a dangerous and difficult moment. My answer to the noble Lord is that through his assessor at any rate my right honourable friend would rightly have first-hand information.

In moving that the clause should not stand part of the Bill, the noble Baroness, Lady Blackstone, in effect asked how relations between the Secretary of State and the funding council could have reached such a low point. She said that it was virtually inconceivable that matters could reach that stage. We are talking about a situation in which the funding council accounting officer is, in the Secretary of State's judgment, failing to fulfil his responsibilities. That could be the result of all sorts of circumstances or differences of approach; but it would add up to a position where necessary action is not being taken by the funding council in an especially severe and difficult situation and where the Secretary of State's responsibility for huge sums of money in the further education sector comes into play.

My noble friend Lord Renfrew intervened in the debate at this point to say, "Ah, if that is the case, then why haven't the Government put down an amendment?" Modestly, my noble friend did not suggest an amendment of the kind to which he put his name, but I shall identify it as being one such as my noble friends Lord Renfrew, Lord Campbell of Alloway and the noble Baroness, Lady Young, put down which addresses the point. The answer is, as I revealed on the previous amendment, that we believe that the direction-making power should be unfettered so far as concerns the further education sector.

The question has been raised by a number of noble Lords as to why the Government have not tabled the same amendment to this clause as we tabled to Clause 77. I have not been inactive in the matter and, as your Lordships know perfectly well, I put down an amendment to Clause 77 on the Government's behalf which preserves academic freedom in relation to the direction-making power. I know that I am going over familiar ground, but I do so for completeness. The answer is that much as we respect the achievements of many of the colleges in this sector, some are not long-standing and do not have a track record which can compare with that of some historic universities and which can give us the necessary confidence to limit our power. That is not supposed in the least to be a snide remark. I have in mind the ultimate power of the Secretary of State in respect of literally huge sums of money.

Finally, the Secretary of State must act reasonably in the exercise of the direction-giving power under the clause. I recognise and respect the strongly held views which have been expressed on this clause, but I have to say that for the Government it is an important clause, providing a long-stop power in the new further education sector.

10.15 p.m.

Baroness Blackstone

My Lords, I do not intend to make a long speech at this time of night in response to the Minister. He said that it was inconceivable that the Government or the Secretary of State should not have long-stop powers, but he was unable to give a single example of where he has previously needed such powers. Nor was he able to demonstrate why he suddenly needs them with respect to this Bill and these institutions. In any case, he already has a long-stop power: he can replace a funding council which turns out to be unfit.

The Minister also said that the Secretary of State would have first-hand information about things that were going wrong. I am not quite clear from where this first-hand information would come. The Secretary of State has many duties, responsibilities and obligations. He cannot have eyes in the back as well as in the front of his head. Presumably he must rely on a single assessor who is appointed to the funding council.

Again, it seems to me far-fetched to assume that the funding council itself would not be able to have the kind of information that is necessary and would not take the action that is needed, were something to go badly wrong with respect to the financial accountability of particular institutions.

The more the Government try to defend the clause, the less convinced I become. The remarks made as to why the same amendment on Clause 77 was not tabled to this clause were, if I may say so, a little insulting to the further education colleges. The fact is that many have a long track record. Even if their track record is short, that does not in any sense imply or mean that they will be irresponsible in the way in which they spend the money allocated to them or the way in which they run their courses.

Yet again, I return to the point that has been made on a number of occasions. I reiterate what I said: it is the funding council's responsibility to ensure that the track record is adequate.

I have no intention of dividing the House on this clause at this time of night. However, I wish to retain the opportunity to return to the matter on Third Reading. I hope the Minister will accept that that course is necessary on this occasion although normally one would not necessarily return to issues of this kind on Third Reading. We need to hear, however, how the Government will respond to amendments that have been tabled to the identical Clause 77 with respect to higher education and then make up our minds about what we should do with respect to this clause. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 55 [Reorganisations of schools involving establishment of further education corporation]:

Lord Cavendish of Furness

moved Amendment No. 125: Page 39, line 35, leave out ("Subsections (2) and (3) below apply") and insert ("Subsection (2) below applies"). The noble Lord said: My Lords, on behalf of my noble friend I wish in moving this amendment to speak also to Amendment No. 126. This amendment removes subsection (3) from Clause 55. Clause 55 makes provision regarding the site of a school which is closed as part of a reorganisation scheme where that site is to be used by a further education college established in connection with the scheme. Subsection (3) provides that where the land in question is held on trust for the purposes of the school being closed it will henceforth be held on trust for the purposes of the new further education college.

It has been pointed out to us that there are circumstances in which the provisions of subsection (3) could result in the appropriation of Church property for use by a secular institution in the new sector. This would occur if a secular college were to be established on land used by a voluntary school which was closed as part of a reorganisation scheme associated with the setting up of the college. That was certainly not our intention. Removal of subsection (3) ensures that where a voluntary school is closed as part of such a scheme, the land will continue to be held on the existing denominational trusts. I beg to move.

The Lord Bishop of Guildford

My Lords, I wish to express my gratitude to the Government for meeting the point that has been put to them. These amendments are most welcome. I support the amendments.

On Question, amendment agreed to.

Lord Cavendish of Furness

moved Amendment No. 126: Page 40, line 6, leave out subsection (3).

On Question, amendment agreed to.

Lord Belstead

moved Amendment No. 127: After Clause 56, insert the following new clause: Saving as to persons detained by order of a court (" . No function conferred or imposed by this Act on a further education funding council shall be construed as relating to any person who is detained, otherwise than at a school, in pursuance of an order made by a court or of an order of recall made by the Secretary of State.").

The noble Lord said: My Lords, this amendment provides that no function conferred or imposed on a further education funding council by the Bill should relate to any person detained in pursuance of an order made by a court or of an order of recall made by the Secretary of State. That would mean, in particular, that the funding councils' duties to secure the provision of facilities for further education under Clauses 2 and 3 would not apply to prisoners. The existing statutory position in relation to the education of prisoners would be preserved. The issue of prison education was first drawn to the attention of the House by the noble Lord, Lord Donaldson of Kingsbridge, in Committee. I am most grateful to the noble Lord for spotting the deficiency which this amendment is intended to remedy. I beg to move.

Baroness Seear

My Lords, the noble Lord, Lord Donaldson, has asked me to say that he is extremely glad that the Government have been able to table this amendment. I join in those sentiments.

Baroness Blackstone

My Lords, I, too, welcome the amendment. I am extremely glad that the Government have been able to table it.

On Question, amendment agreed to.

Clause 58 [The Higher Education Funding Councils]:

Lord Belstead

moved Amendments Nos. 128 and 129: Page 42, line 17, leave out from ("State") to ("persons") in line 19 and insert: ("(a) shall have regard to the desirability of including"). Page 42, line 22, after ("education") insert ("and, in appointing such persons, he shall have regard to the desirability of their being currently engaged in the provision of higher education or in carrying responsibility for such provision"). The noble Lord said: My Lords, in moving Amendments Nos. 128 and 129 I wish to speak also to Amendment No. 131. During the debate in Committee on 12th December a number of noble Lords spoke in favour of amending Clause 58 to require the Secretary of State to take account of the desirability of including current practitioners in the membership of a higher education funding council. In responding to these comments and in particular to amendments moved by the noble Lords, Lord Dainton and Lord Flowers, I said that I believed that there was some cogency in the arguments put forward. I undertook to consult the Secretary of State and to report back to the House at the next stage of the Bill.

Following such consultation I move these amendments which would preserve necessary flexibility in appointments by not fixing quotas for particular categories of member or requiring all members from higher education backgrounds to be currently engaged in the provision of higher education. But they would require the Secretary of State in appointing members from higher education backgrounds to a higher education funding council to have regard to the desirability of their being currently engaged in the provision of higher education or in carrying responsibility for such provision.

In practice, I have not the slightest doubt that, even without these amendments, the new higher education funding councils would include a substantial number of members from higher education backgrounds who were current practitioners. I believe these amendments provide the statutory underpinning that noble Lords were looking for. I beg to move.

Lord Dainton

My Lords, I should like to give my support to Amendments Nos. 128, 129 and 131. If, as I hope, they are agreed by your Lordships, I am sure that we can be clear that any discussions that take place within the council will never be deprived of that most vital and essential component; namely, members who have up-to-date, practical experience of the key processes of teaching and research in the universities and, equally important, the administrative infrastructures which are necessary to support them. It is no exaggeration to say that, without that component, the council would be bound to fail in the proper discharge of the duties laid upon it in the Bill and would have no credibility with the universities. I sense from the debates that your Lordships would wish to agree if only because of the nature of the debates on similar amendments in Committee.

In conclusion, I should like to express my personal gratitude to the Minister and, through him, to the Government for this concession. I am sure that it will never be a cause for regret.

On Question, amendments agreed to.

[Amendments Nos. 130 and 131 not moved].

Schedule 1 [The Further and Higher Education Funding Councils]:

Lord Belstead

moved Amendment No. 132: Page 66, line 6, leave out from ("shall") to ("as") in line 7 and insert ("as regards any member in whose case the Secretary of State may so determine, pay or make provision for the payment of such sums by way of pension, allowances and gratuities to or in respect of him"). The noble Lord said: My Lords, this is a technical amendment which would bring the provisions concerned into line with previous legislation. Its effect would be to remove an ambiguity in the present text. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 133 and 134 not moved.]

Lord Belstead

moved Amendment Nos. 135 and 136: Page 68, line 18, leave out from ("accounts") to ("and") in line 19. Page 68, line 23, at end insert: ("( ) The statement of accounts shall comply with any directions given by the Secretary of State with the approval of the Treasury as to—

1. (a) the information to be contained in it,
2. (b) the manner in which the information contained in it is to be presented, or
3. (c) the methods and principles according to which the statement is to be prepared,

and shall contain such additional information as the Secretary of State may with the approval of the Treasury require to be provided for the information of Parliament."). The noble Lord said: My Lords, these are technical amendments which will bring the provisions concerned into line with previous legislation. Their effect is to remove small ambiguities which exist in the present text. I beg to move.

Lord Morris

My Lords, I rise to seek clarification on one point. Amendment No. 136 clearly states that: The statement of accounts shall comply with any directions given by the Secretary of State"— in practice, that would be the Secretary of State for Education and Science— with the approval of the Treasury". Does that mean the permanent officials at the Treasury or that it will be within the political control of the First Lord of the Treasury? That latter phrase is also repeated later in the amendment. Perhaps my noble friend can explain that to me.

Lord Belstead

My Lords, it is not an unusual reference and ultimately it means the First Lord of the Treasury.

On Question, amendments agreed to.

Clause 61 [Administration of funds by councils]:

[Amendments Nos. 137 to 138A not moved.]

Lord Addington

moved Amendment No. 139: Page 45, line 8, at end insert: ("(c) make grants, loans or other payments to the governing body of any Higher Education Corporation in respect of specific expenditure to ensure that the standard of student support services is adequate and comparable to those of universities."). The noble Lord said: My Lords, this is an important amendment and it is rather unfortunate that it happens to have come up for consideration at this time of night. When we discussed a similar amendment on the same issues in Committee, we faced the same dilemma regarding the clock.

The basic thrust is that the new universities should have their support facilities for students brought up to a standard that is regarded as adequate in the university sector at present. The main impetus behind this amendment is the fact that universities are traditionally thought of in England and Wales as having more to do with the experience of total education than with simply passing examinations. Moreover, as a result of the pressures placed upon them for such things as student accommodation, universities generally find themselves bearing a far higher proportion than other institutions of the costs of keeping their students. Accommodation provided by the universities is cheaper and generally better organised than other accommodation.

I should like to explain further the logic of the amendment. Going to university is generally regarded as a fun experience. That is often why people go there. At this time of night it may seem a little out of place to bring forward such an argument in view of the entrenched arguments that we have heard, but the fun element of going to university is a very important factor.

If we bring the facilities of the new universities up to the standards of the old universities, we shall be removing one of the aspects of the old binary divide. A very real factor to be taken into account when going to a university was that one generally had better student union facilities, better sports facilities and accommodation where one's money went further. I defy anyone to have a good time on an empty pocket.

All that forms an important part of the process of learning from student activities outside the lecture room. I believe that it is very obvious. That is why it should be considered. It is one of the last aspects of the binary divide to remain. It has nothing to do with academic standards. Certainly the polytechnics have won the argument on that score one hundred times over. Not for one minute would I suggest that their academic standards are not up to the level of the universities.

Unless we deal properly with the problem, we shall retain a part of the binary divide. I therefore suggest that this amendment should be considered very carefully. I hope that the Government will have something sympathetic to say on the matter. I beg to move.

10.30 p.m.

Baroness Perry of Southwark

My Lords, I do not in any sense wish to turn down an offer of increased funds which the noble Lord seems to be making in respect of the polytechnics. But I am not at all sure that that is what the amendment will produce. First, the wording is rather strange, in that it suggests that the council should: make grants, loans or other payments to the governing body of any Higher Education Corporation … to ensure that the standard of student support services is adequate and comparable to those of universities". My understanding is that the new higher education funding council will make grants to the universities —new ones and old ones—and to some higher education corporations, which will be smaller colleges that are neither universities nor former polytechnics. I have difficulty in understanding exactly what the noble Lord intends. If he argues that the polytechnics should be brought up to university standard in respect of their student support, it seems to me that that is not exactly what the amendment says.

As it stands, the amendment would seem to recommend that every small college, including former colleges of education and other small specialist colleges, should have student support that is considered adequate in comparison with that of any university. That would be a utopian recommendation which it would be very difficult to accept. It would be ideal, but extremely expensive.

In relation to the comparison between the student services of polytechnics and those of universities, I can only repeat what I said at Committee stage; namely, that I do not believe that there is that uniform difference on both sides of the binary divide. Some polytechnics have better examples of student support than some universities.

The wording of the amendment is very efficient if it wishes to ensure that all higher education institutions have equally good facilities and are brought up to the standard of the best. We should all say amen if the money were available. I cannot support the amendment in its current form, although I support entirely the spirit in which it is tabled.

Lord Morris of Castle Morris

My Lords, the amendment deals specifically with the issue of student support services. I would not be able to agree completely with all that the noble Baroness, Lady Perry, said. Although I believe it indisputable that some polytechnics have excellent student support services which are better than those of some universities, if we were to compare all with all we would find that universities do rather better financially than polytechnics.

Two years ago the university college which I had the privilege to command decided to revise and re-issue its undergraduate prospectus. We had no funds to research that project, not even enough for a quick and dirty consultancy by Touche Ross. We had to make our own inquiries and put out our own questionnaires. What emerged first-hand from that was that our student services were manifestly superior to those of many polytechnics which we took the care to consult at some depth and to visit.

Students choose institutions at which to study for a wide variety of reasons. But it emerged from our research that they tend to evaluate carefully the quality of student support services when they make their choice of where to spend three years. That is not surprising. Student unions, which offer a wide variety of good quality services such as counselling and financial advice—we are not talking about sporting facilities and games of chance and so on; we refer to serious issues and serious services—find that they are a good selling point and that they are a means of attracting students in a competitive situation.

Polytechnics have been with us for several decades. Their academic activities have blossomed and prospered. On the other hand, their plant has grown old and decayed. Much of it was put up rather quickly in the fifties and sixties at a time when flat roofs were much in evidence. Many of those have leaked—and how we know it! A great deal of the resources of polytechnics have necessarily had to go to keeping the water out and the roof up; and student services have not been among the highest priority in all of the polytechnics. Many of the polytechnics have inherited buildings and facilities that are too old, too small, too worn out or simply not designed for the various new activities that are being carried out in them. The ending of the binary divide is not simply a matter of changing names. It must bring about a proper levelling up between institutions.

The noble Baroness, Lady Perry, stated during Committee stage that she did not believe that there was necessarily an uneven distribution of facilities. There is some evidence about student support services which does not appear to support her contention. Work carried out by the professional association of managers of student unions for 42 universities and 40 polytechnics for the 1991 finance survey found that there was an uneven distribution of funding between polytechnics and universities. The ratio of student union block grant received per student clearly seems to favour the universities. Although some universities have a lower ratio than some polytechnics, broadly speaking, across the band the trend is for universities to obtain the better deal.

With a future which includes reduced grants, student loans, bank overdrafts, escalating rents and reduced facilities in, for example, libraries—which some of us believe to be fairly close to the centre of what higher education is about —students need all the help that their support services can provide. The amendment—perhaps in certain respects infelicitously worded—seeks to ensure a fair and just distribution of what will inevitably be increasingly scarce resources. I hope that the Government will look kindly on it.

Earl Russell

My Lords, I wish to ask the noble Baroness, Lady Perry, to take this amendment a little more seriously and bring a little more imagination to bear in considering the fears behind it. In any merger there are inevitably fears. If those fears are not understood on either side they tend to fester. They were not in 1707 and we are still paying for it.

Inevitably there is inside universities a certain fear that what we may be seeing is not the abolition of the binary line, which we should welcome, but the shifting of it a little higher up so that rather more institutions come below it. Therefore, there is no Tyrolean anxiety coming to the merger from the university side that it should not be used to devalue the standards, facilities and qualities associated with the name of "university". I am sure that there are equivalent fears on the part of the former polytechnics. I shall not put words into the mouth of the noble Baroness and I shall not try to say what they are. I am prepared to listen when told about them and I am sure that I shall need to do a great deal of listening. The student support facilities are one area where this type of fear may exist. They easily come under pressure when rapid expansion is going ahead. Who stops to say, "We cannot take in another thousand students because there is not room in the refectory"? But often there is not room in the refectory. Therefore, where will they get their lunch? They are left with the alternative either of going out and paying a great deal more and finding that their money runs out well before the end of term or of going without lunch, in which case their afternoon's work is greatly impaired. That is only one example among many.

There are many places in polytechnics and in universities where student support facilities are strained to the limit. Unless we have some way of spelling out that some protection is needed they will be forgotten. If they are forgotten I am afraid that we might have to pay for it. I would much rather foresee the danger and do something about it now.

Lord Belstead

My Lords, whatever sympathy there may be for the amendment from different parts of the House views have been put forward that it will not do. It will not do from the Government's point of view because it would be invidious to single out one specific purpose for funding on the face of the Bill.

If the funding councils come to the view that there is any need to improve student support facilities in certain institutions they could do so by, for example, making available specific funding and invite institutions to bid for resources on the basis of need. However, my right honourable friend the Secretary of State would not see this as a priority for the councils. That is because the amendment appears to be based on the assumption that student support facilities in higher education corporations (by which I take it the noble Lord, Lord Addington, means polytechnics and colleges generally) are inferior to those in universities. In principle there are no differences between universities and other institutions of higher education in the arrangements concerning student support services. In both cases it is for the individual institutions to make provision from within the resources available to them according to their own needs and priorities. A certain amount of evidence has been called to aid this evening. Recent HMI evidence on polytechnics and colleges of higher education shows that the standard of student support services is generally satisfactory.

If that view sounds complacent I turn to my noble friend Lady Perry, who made a wise remark. She said that in some cases the support services would be better and in other cases they would not be as good as the university sector. I should have thought that the probability is that there lies the truth and not the special case put forward by the noble Lord this evening. Even if there is a special case, I do not believe that it is possible to put a particular funding objective on the face of the Bill. On that basis, I resist the amendment.

10.45 p.m.

Lord Addington

My Lords, listening to the Minister's reply, I regret that we are discussing this amendment at such a late hour because it did not address the real issue.

The amendment seeks to bring all student support services up to the standards which are found in universities. It is worth remembering that the English model is that university students do not live at home. That is probably a historical accident for which Oxford and Cambridge are responsible. University students live away from home and therefore they place an extremely high emphasis on student support facilities. Where students do not have those support facilities and the back-up of their homes, they find that they are not so well off. That is why the older and better endowed universities have such a big advantage and such a major drawing point.

My intention was to improve the support services of some of the universities which are less well off in that regard. As a rule of thumb, the polytechnics are not so well endowed. They were originally created as establishments for more locally based students. They have now drawn in students from other areas because of the increase in the academic courses which they offer. Unfortunately, they only get the second bite of the cherry as regards students with good examination results. We are trying to get rid of that binary divide.

I must read the noble Lord's reply on this matter. However, I give no guarantee that I shall not return to this matter at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Renfrew of Kaimsthorn

moved Amendment No. 139A: Page 45, line 18, leave out ("subject to that"). The noble Lord said: My Lords, in my view this is not merely a drafting amendment. If I am assured that it is, that will be fine. However, I should like to try to explain why I do not believe that that is so.

I moved an amendment in Committee which I withdrew when the Minister gave a reply which I did not fully understand. I have read the reply several times and I still do not fully understand it. I have reached the conclusion that perhaps the noble Lord did not understand the point which I was making, although that was no doubt my fault.

This is not a trivial matter. The three words "subject to that" are not in the equivalent section of the Education Reform Act 1988 nor—it is interesting to observe—are they in the equivalent position in the Further and Higher Education (Scotland) Bill, which is at present under discussion in another place.

The only way in which I can try to make myself more clearly understood than I was able to do in Committee is to try to sketch out a scenario. I hope it will not be a nightmare scenario, but that remains to be seen.

First, let us imagine that a funding council makes a grant to a department of medicine in a university for certain defined research purposes. Secondly, let us suppose that a philanthropist millionaire has made a munificent benefaction to that same department for the purposes of cancer research —a well defined purpose. Thirdly, let us suppose that the department of medicine does not carry out the research in a manner which is to the satisfaction of the funding council or the Secretary of State so that a question arises as to repayment being made, in whole or in part, of the sums paid by the council because the terms and conditions under which the sums were paid are not, in the council's view, complied with.

What does the department do in those circumstances? It may try to make economies from further grants derived from the funding council; it may borrow; or it may seek to raise other resources in order to make the appropriate repayment. However, it is conceivable that it could in fact lay hands on the benefaction of the philanthropist millionaire. What is disquieting is that it might be required by the council to lay hands on the benefaction—the golden egg—of the philanthropist millionaire. That would be highly undesirable. First, it would be wrong in itself; secondly, it would be counterproductive.

All of us in the university sector at the moment are anxious to raise money from independent sources for research and other purposes, and of course we have the warm encouragement of the Government for doing so, which is quite proper. It would therefore be most unfortunate if money with a specific benefactory purpose were used in this way. It would certainly be counterproductive in securing further benefactions. I would find it difficult to continue raising money for my department and my university if I could not look a benefactor in the eye and assure him or her that the money would be used for the purposes for which it had been given to the department.

The 1988 Act gave an unqualified restriction which would prevent such an eventuality. Here the restriction is qualified by the words, "subject to that", which, on my readings is a subordinating phrase. I shall be happy to be corrected by legal opinion; there are noble and learned Lords present who may be able to do that, but I have not so far been authoritatively corrected on that. The phrase "subject to that" suggests—if I may use that verb—beta to alpha, so that beta is no longer an absolute obstacle. The phrase "subject to that", as I read the clause, empowers the funding council to lay its hands on the benefaction or direct that the benefaction be used for this purpose.

I hope that the Minister can assure me that I am wrong, but I hope that he will do so perhaps more analytically than he was able to do last time. If the phrase "subject to that" has no such purpose, why is it inserted in the Bill when it was not in its predecessor Bill? Why was it not inserted in the Further and Higher Education (Scotland) Bill? If the Minister can persuade us that these words are completely immaterial and unnecessary, well and good. But if he does so persuade us, then surely the omission of those words would scarcely be deleterious. Either way, they could safely be omitted. I beg to move.

Lord Campbell of Alloway

My Lords, I support the amendment. It surely cannot be the intention of the Government to kill or discourage the benefactory goose. Perhaps one can proceed on common ground that that cannot be the intention. If that is so, what is the meaning of "subject to that"? It imports a qualification; it imports a priority. What is it?

If it imports a priority, as has been pointed out, it discourages the benefactory goose. We therefore need an assurance also that it is not intended to create a priority. But we do not know what it is intended to create. If it were deleted, it would make sense according to what I believe is the Government's intention. We require a measure of assurance on the matter. We wish to know why it was introduced into this Bill, not existing in other Bills, and exactly what it is supposed to mean.

Lord Dainton

My Lords, I support the noble Lords, Lord Renfrew and Lord Campbell, though I regret I do not possess their analytical powers. I am trying hard to follow subsection (4) but I find it difficult. I fear that it establishes the right of the council to recover payment, in whole or in part as the noble Lord, Lord Renfrew said, if any terms or conditions which the council attached to a grant which it had made are infringed by the recipient. Then the subsection goes on to state that the terms and conditions cannot relate to grants received from other sources.

All that is splendid until one comes to those three little words "subject to that" which, as the noble Lord, Lord Renfrew, has pointed out, are not in the equivalent Scottish Bill and neither are they contained in the FE part of the Bill before us. I would like to be reassured that it is a wrong interpretation to say that those words open the door to the council being able to claim back some money unless the university used its money from other sources in some particular way laid down by the council.

The noble Lord, Lord Renfrew, gave a vivid illustration. He has drawn our attention to the fact that this provision was not in the 1988 Act. Like the other two noble Lords, I cannot really believe, if my interpretation and theirs is correct, that that is intended by the Government. Therefore I hope that the noble Lord, Lord Belstead, in replying can agree to some wording which will place moneys which a university receives from non-council sources completely beyond the grasp of a council. If that can be done beyond peradventure, I shall be quite content.

Lord Adrian

My Lords, perhaps I may join the company of those noble Lords who have been profoundly puzzled by the meaning and intention of this particular clause and for the same reason. The words "subject to that" seem to be otiose if one assumes that the Government's intention is what it has been assumed to be by various noble Lords who have spoken. If they are not otiose, then the intention seems to be, as stated, to subject the last part of subsection (4) to paragraphs (a) and (b). That does seem to be acceptable. I very much hope that the Minister will be prepared to let the three words "subject to that" disappear. I do not believe that they make the slightest difference to what was intended in that clause. I hope that they do not.

Lord Belstead

My Lords, in responding to a similar amendment moved by my noble friend Lord Renfrew in Committee, I assured him that these words do not represent any change of policy. In passing I thank my noble friend who, in what I believe to be the politest way I have ever heard, told me quietly that my answer was incomprehensible on that occasion. I repeat the assurance that I then attempted to give my noble friend.

These words are certainly not intended to enable the new funding councils to interfere with institutions' private income. Their sole purpose is to acknowledge the possibility that where an institution has to repay grant or pay interest on such repayment, it may be that it resorts to funds that the council has not provided. Where a council requires repayment of grant or the payment of interest, an institution has a number of options. It may be able to use funds provided by the council for other purposes provided that the council agrees. It may be that the institution will borrow. Both of those are examples given by my noble friend Lord Renfrew.

It may be that the institution will resort to some form of reserve fund of its own. None of those options is closed off by the words in the subsection. However, the institution may choose to use income from private sources provided—and I emphasise the proviso—that to do so would not be inconsistent with any conditions subject to which that income was received. As regards the example given by my noble friend, the funding council could not require the department of medicine to repay funds from a particular source. If the money from the benefactor had been given on trust for a particular purpose it would not be available for any other purpose. In practice the department of medicine would be part of a larger institution from whose general funds the repayment could be made.

In those circumstances the conditions under which a repayment is made could be said to relate to income derived from sources other than from the council. It is surely not unreasonable to require an institution which has received public money for a particular purpose and which has not used it for that purpose to repay it and, where it has delayed repayment, to pay interest. It would be unreasonable for that institution to claim that it should not repay because it had exhausted the funds provided by the council and in consequence would have to resort to funds from some other sources.

These are the circumstances against which the words "subject to that" are designed to guard. Those words are not designed to block off finding repayment from various sources of funding, which my noble friend Lord Renfrew suggested in his words and which I have repeated.

I hope that this explanation has satisfied my noble friend of the very limited but, as the Government believe, necessary purpose served by these words. I have today looked carefully into this once again and I hope that I may have satisfied your Lordships.

11 p.m.

Lord Renfrew of Kaimsthorn

My Lords, I am grateful to my noble friend. He has given a much fuller explanation on this occasion than he was able to give on a previous occasion. I am grateful to my noble friend Lord Campbell of Alloway for his support. I am very much aware that in matters of definition and of reading legal documents, he is a person of vast experience. I am grateful to noble Lords opposite.

I am not a lawyer and so I do not feel that it is appropriate for me to try to make coherent off-the-cuff remarks. However, I should like to make this point. The Minister said that an institution or the department in question may choose to repay funds from one source or another. I am sure that it would be entirely acceptable if, for instance, the benefaction was not one with narrow terms, and if the department genuinely chose to repay sums owing to the funding council from the benefaction. If that was the choice of the department, I could see merits in it. However, I would draw the attention of my noble friend to the verbs in the clause. The clause states: The terms and conditions on which a council may make any grants, loans or other payments … may in particular—

1. (a) enable the council to require the repayment … and
2. (b) require the payment of interest in respect".

There is no element of choice there. "Require" may well include choice, but the power is one which requires. I am afraid that I remain unable to follow the full logic of the explanation which my noble friend purports to have given.

It would be inappropriate to divide the House at this hour of the night. However, what I should like to do—I hope my noble friend will find this reasonable—is to ask some noble and learned colleagues, including the noble Lord, Lord Campbell of Alloway, to be so kind, if they would, as to give this clause further attention. It would be helpful if my noble friend would do so. I certainly do not want to set my readings against those of himself or of the Government; but I do not believe that the matter has been entirely clarified. Therefore, in withdrawing the amendment, I must give notice that I think it likely that it will have to come back at Third Reading.

Amendment, by leave, withdrawn.

Clause 62 [Administration of funds: supplementary]:

Lord Belstead

moved Amendment No. 140: Page 46, line 6, leave out ("particular") and insert ("religion or").

On Question, amendment agreed to.

[Amendment No. 141 not moved.]

Lord Belstead

moved Amendment No. 142: Page 46, line 11, leave out ("particular") and insert ("religion or").

On Question, amendment agreed to.

[Amendments Nos. 143 and 144 not moved.]

Lord Cavendish of Furness

My Lords, I beg to move that further consideration on Report be now adjourned.

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

House adjourned at five minutes past eleven o'clock.