HL Deb 12 March 1992 vol 536 cc1457-79

4.40 p.m.

Report received.

Clause 7 [Scottish Further Education Funding Council]:

Lord Carmichael of Kelvingrove moved Amendment No. 1: Page 4, line 28, leave out ("may") and insert ("shall").

The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendment No. 2. At Committee stage I indicated that I might bring back this amendment at Report stage. I make no apologies for doing so. My intention is to make provision in the Bill which would commit a future Secretary of State to creating a further education funding council. At Second Reading the noble Baroness, Lady Carnegy of Lour, said that it would be inevitable that a future Secretary of State for Scotland would set up a further education funding council. I was happy with that. However, she will be aware that the Minister of State at the Scottish Office, Mr. Michael Forsyth, referring to this matter, said: I remain of the view that it would be a mistake to establish such a council".—[Official Report, Commons, 5/2/92; col. 306.]

That comment was made during the Report stage in another place and not, as indicated in previous briefings, at Second Reading. The implication is that Mr. Forsyth's comments were made after the Government had introduced the new clause into the Bill and does not suggest that the present Government were convinced of the merits of a further education funding council as it appeared during the course of discussions in Committee in another place. Despite the good faith of the noble Lord, Lord Strathclyde, we believe that a commitment should be written into the Bill to ensure that a funding council is established.

Amendment No. 2 is concerned with the question of the formation of a further education funding council. Amendments to the Bill were tabled at Report stage in another place in order to meet a commitment made by the Minister to allow for the establishment of a further education funding council. Because of the timescale imposed on consideration of the Bill, there was insufficient time for close examination of the new Clause 7. It is likely that all parties would wish to consider the correct duties and powers and membership of a funding council in some detail before it is established, rather than after. If the first amendment is accepted, this amendment commits the Secretary of State to full consultation before establishing a funding council.

We on these Benches are particularly concerned that while in England and Wales a further education funding council will have duties in respect of further education, those duties in Scotland are to be vested in the Secretary of State for Scotland. No clear explanation as to why this difference should be preserved was given at Committee stage. Given the timetable set for completing consideration of the Bill, it is essential that there should be scope for full consultation on such matters before a funding council is put into place. I beg to move.

The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde)

My Lords, it is a pleasure to return to this subject which we discussed at Committee stage. The noble Lord pressed the Government to make a decision on establishing the further education funding council. However, as I indicated then, and as the noble Lord appreciates, our approach is designed to ensure flexibility and is firmly supported by the college principals. I reiterate that view. Let us ensure the success of the colleges' new status before we consider the case for establishing a funding council.

Good progress is being made by the colleges in preparing for their new responsibilities and there is a momentum for change being established. The momentum would be jeopardised if we were to introduce a funding council into the picture. No date is included in the amendment for the establishment of a funding council, leaving the date of establishment still to be determined by the Secretary of State in an order made under Clause 7. In essence, that is no different from the existing provision. Inserting "shall" rather than "may" would only confuse the colleges of our objectives, and as I said earlier, our prime objective must be to ensure that the colleges smoothly take on their new responsibilities at 1st April 1993.

The noble Lord went on to explain his thinking behind Amendment No. 2. It is, of course, normal practice for all governments to carry out consultations before taking major decisions and the creation of a further education funding council would be no exception. I have some sympathy with what the noble Lord is saying to the House and to avoid any doubt I can give an undertaking that the Secretary of State would consult representatives of boards of management, education authorities, and others with an interest, before any order was made establishing a council. No such step would be taken unless there was clear support for it. In any event, the amendment as drafted uses terms which I understand do not fit into the Bill.

I hope that those assurances will give the noble Lord some comfort and that he will feel able to withdraw his amendment.

Lord Carmichael of Kelvingrove

My Lords, I am very pleased that the Minister has been so specific on Amendment No. 2 and that we have it on record that there will be full consultation. I have never understood why there is such reluctance on the part of Ministers and their advisers, of whatever party, to refuse to have "shall" instead of "may".

The Minister has gone quite a long way in regard to Amendment No. 1, which calls for the establishment of a further education council and particularly on Amendment No. 2, which calls for consultation before the establishment of such a council. Knowing that he is a man of honour I am only too pleased to accept his statement. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Schedule 2 [Constitution and proceedings of boards of management]:

Lord Carmichael of Kelvingrove moved Amendment No. 3: Page 44, line 42, leave out ("ten nor more than sixteen") and insert ("sixteen nor more than twenty").

The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 4 and 5. This group of amendments seeks to make provision for at least two persons nominated by a local education authority to have a place by right on the board of management.

We on these Benches have consistently sought to make provision for two representatives of local authorities to have a place by right on college boards of management. An essential part of the suggestion is that the minimum size of the board needs to be increased to ensure that there is scope for local authority and other interests on the board, once the positions given by statute to employers, staff and students of colleges have been filled.

At Committee stage Government supporters indicated that their opposition to local authority involvement in boards of management reflected a concern that local politics would be drawn into the discussions of the boards. Clients of colleges appear, in the Government's view, to be employers and students only—and it has always been established in the mind of the party opposite, that employers, by some wonderful freak, are never political whereas local authority people always are. However, we on these Benches believe that it would be of benefit to have two local authority representatives on boards to give the point of view of local authorities.

Amendment No. 4 reinforces the points I have already made in these amendments. The amendments are all concerned with increasing the number of people on boards in order to include representatives of local education authorities. I beg to move.

Lord Strathclyde

My Lords, I join the noble Lord in speaking to Amendments Nos. 3, 4 and 5. As I explained at the Committee stage, the Secretary of State will make the appointments to reconstituted college councils later this year. These appointments will be designed to ensure continuity in membership with the existing college councils and the need to ensure a stronger employer presence. I do not think that the noble Lord will disagree with that.

The Scottish Further Education Unit, in a report on the present college council system, identified a number of helpful criteria to use when making appointments. These include an appropriate level of seniority, a record of involvement with the college, expertise with education and training, and a balanced representation of employers to reflect the college's curriculum. This will be helpful in considering membership both when the Secretary of State makes the initial appointments and thereafter when boards fill vacancies themselves. So far, so good. These arrangements do not preclude education authority representatives from serving. I think that boards will see advantage in such appointments—as clearly the noble Lord, Lord Carmichael, does—either to the main board or to committees. The noble Lord will agree with that. Much will depend on the personal qualities that individuals can bring to bear.

Other links, of course, need to be considered, for example, with higher education institutions, where there are exciting prospects opening up of much closer collaboration between FE colleges and higher education. That is a vital means of opening up access to higher education via the non-traditional route. Programmes such as the government-financed Scottish wider access programme have stimulated these developments and we will continue to encourage such developments in further education. That goes with the grain of developments in Scottish further education, where 60 per cent. of students are aged over 18, and this can be expected to grow as increasing numbers of under 18 year-olds stay on at school. Colleges therefore need to have many linkages. Some may best be forged at school or university level. It is, I would suggest, best to leave this for boards to determine in the light of experience and the nature of their college.

The noble Lord will not take it amiss if I simply point out that the drafting of the amendments would have some undesirable results. I hope that, with the explanation I have given, he will withdraw the amendments.

Lord Carmichael of Kelvingrove

My Lords, the Minister will be aware that it is rather late for me to discuss whether or not the drafting is right. If he finds, on the advice of his experts and counsel, that the amendments will not fit into the Bill there is obviously an insurmountable wall which we shall not be able to do much about. The general idea is that there should be local authority representation. Although the Minister said that any intelligent group would accept and perhaps look for suitable local authority candidates to sit on the college boards, I do not believe that that was strong enough. The noble Lord said that this would happen provided the candidates were suitable. I take the view that if someone is democratically elected to a local authority he is ipso facto considered by the people in that area to be a responsible person. That is why we were concerned that people should be nominated by representatives of the local authority.

Having made my point for local democracy I acknowledge that it is unlikely at this late stage, given the Minister's, I am sure, well-founded view that the wording is inadequate, that the amendment can be accepted. I therefore beg leave to withdraw it.

Lord Hughes

My Lords, perhaps I may ask a question before the amendment is withdrawn. The noble Lord, Lord Strathclyde, said that the drafting of the amendments was defective and could cause difficulty. What could be defective about substituting the words "sixteen nor more than twenty" for the words "ten nor more than sixteen" when all the amendment is doing is changing the figures?

Lord Strathclyde

My Lords, that is a very good point. I did not want to go through the reasons why they were defective but the noble Lord has asked me a question and I think it is right that I should answer it. It is in the consequential amendments that the drafting of these amendments creates undesirable results. Board members should all be subject to the same grounds of disqualification and removal if, for example, imprisoned for fraud. The amendment would mean that education authority nominees would not be while everyone else would be. That is clearly undesirable. I hope that that explains the position. I do not want to make a meal of it though.

Lord Hughes

My Lords, I cannot say that I am terribly convinced. I have asked the question and I think that I have received a rotten answer.

Lord Carmichael of Kelvingrove

My Lords, only someone like my noble friend, who has long experience in local government, could have pulled out this good point. It is one with which, in fairness, I do not think the Minister's answer even began to deal. However, I am sure my noble friend will agree that there is little we can do at this late stage. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 4 and 5 not moved.]

Clause 16 [Transfer of property etc. to boards of management]:

Lord Carmichael of Kelvingrove moved Amendment No. 6: Page 13, line 4, leave out paragraph (c).

The noble Lord said: My Lords, we discussed a similar amendment in Committee but the point it raises is still causing worry to local authorities. They are not nit-picking in terms of the present Government. They are concerned about future governments, not the next one which obviously would be sympathetic to local authorities but others in the future which would not be.

The purpose of the amendment is to remove the provision that the transfer of liabilities from the education authority to the college board should not include debt charges relating to the colleges. It is entirely inappropriate that local authorities should continue to pay debt charges on property which will be transferred to the college boards on the first transfer date. The Government have maintained from the first that this provision has been included in the Bill for administrative purposes. First, the Government argued that it would be difficult to establish the debt pertaining to each college. Thereafter, when local authorities had provided such information quickly and easily, it was suggested by government that it would be difficult to untangle debt since loans taken out by local authorities were made up in a complex way.

Since then we have been assured that in practice there is no difficulty at all in disentangling debt for a particular building. The debt is managed largely through consolidated accounts and it has been a simple matter to identify that around £86 million of total debt is outstanding. The Government have acknowledged that local authorities hold the expertise in such loan arrangements. On 3rd March of this year the noble Lord, Lord Strathclyde, made it clear that he partly agreed with the local authorities. It is these expert officers who have advised us that there is no technical difficulty in making such a transfer.

What seems to be the basis of the matter was finally referred to by the noble Lord, Lord Strathclyde. He said that, if historic FE debt charges were to transfer, that sum would have to be found out of the Secretary of State's block".—[Official Report, 3/3/92; col. 775.] We believe that the Government must be pressed to acknowledge that it is this reason, rather than the previous rather misleading statements, which make the Government determined to leave debt with the local authorities.

The Government have also suggested—I am sorry to go on, but this is the one point in the Bill about which I, and many local authorities feel particularly strongly—that debt charges are met almost pound for pound by the Secretary of State. In fact, currently around 12 per cent. of the debt will be borne by the poll tax, plus any under-estimation of the level of inflation in the grant settlement. The convention takes the view that the fact that a relatively small proportion of the cost of debt repayment is currently met by the poll tax does not make the arrangements any less unjust and leaves open the possibility, under future financial regimes, of local government finance meeting a larger proportion of the charges.

The convention also takes the view that it is impossible to escape the conclusion that the proposal amounts to bad accounting practice which flies in the face of the principle of local authorities being accountable for their own expenditure. The situation would become even more outrageous if colleges disposed of land or property in the future whereupon it is possible that local authorities would be paying debt charges on property that they had sold to a third party. The Minister may remember that I put forward the example of schools in the area which I used to represent that had been sold to local housing associations. A very good job was done in that respect. But under the Bill a local authority could still be responsible for paying debt charges on property which had already been sold on.

The authority members in Scotland are most worried about the Government's insensitivity in the matter. They feel that the proposal is especially unjust and that it demonstrates a real disregard on the part of central government for local authorities, which are at present struggling to remain accountable to the electorate in difficult financial circumstances. We take the view that central government should not be so ready to disrupt local authority accounting principles simply to solve the Secretary of State's short term financial difficulties. I beg to move.

5 p.m.

Lord Strathclyde

My Lords, I am always keen to be as helpful as possible to the noble Lord, Lord Carmichael of Kelvingrove. However, on this particular amendment, I regret to say that there is very little that I can add to the points I made when we discussed the matter fully in Committee. Our position is clear. Local authorities' authorised loan charges are met on virtually a pound for pound basis in the distribution of the aggregate external finance settlement. FE historic debt will continue to be met in that way after 1st April 1993. Therefore, local authorities will have no additional financial burden.

Further education colleges' capital expenditure will be funded by the Scottish Office education department after 1st April 1993 on a different basis. Instead of loans being incurred, capital grant will be paid. They will not therefore be geared up to take over loan charges, even were it possible accurately to disentangle debt of many years and the subsequent rescheduling of debt that takes place. I know that the noble Lord put forward figures and an example of how that could be disentangled. However, my advice is still that it would be a rather complicated and bureaucratic matter. That is why we have taken the line that such matters should be left as they are.

Further, education authorities are experienced in debt management. It is the most sensible and straightforward arrangement for them to continue to administer it. I should stress, as I have before, that the arrangement will not involve them in any financial cost that they do not presently have.

In Committee, and again this afternoon, the noble Lord, Lord Carmichael, raised the question of boards disposing of property. I should like to draw the attention of the House to Clause 18 which regulates the disposal by boards of management of certain property, including property transferred to a board from an education authority under the provisions of the Bill and property acquired by grant from the Secretary of State. Such disposals require the consent of the Secretary of State and provision is made in subsection (5) for the proceeds, or a portion of them, to be surrendered to the Secretary of State. There is therefore no question of boards having unfettered discretion in that area. I believe that the noble Lord and I both agree that that is exactly the right approach where public funds have created such assets.

I am not sure that the full effect of the amendment is appreciated. Not only would it mean liability for authorised loans would transfer to boards; it would also mean liability for unauthorised loans would transfer. It would reward education authorities for taking out loans without consent as required by statute—Clauses 28 to 32 of the Bill—and render useless the provisions of the Bill protecting college property in the run-up to the transfer of the colleges. There can be no justification for that.

I know that this is a complicated and important matter. However, having aired the situation fully on two occasions, I hope that the noble Lord will agree to disagree with me and that perhaps he will then withdraw the amendment.

Lord Carmichael of Kelvingrove

My Lords, there is no question about it: it is a matter of agreeing to disagree. The Minister may think that my accountancy skills are not adequate to deal with the matter. I would agree with him in that respect. However, from the way that the Minister explained it, I think that a coach and horses could be driven through any possibility of local authorities being dealt with fairly.

There is always the assumption that the Secretary of State will deal with the matters in the way that we have discussed. One of the horrors that we have in Scotland is that perhaps in 20 or 25 years' time a present Minister of State could become the Secretary of State for Scotland. I am sure that he would give his consent to the selling off of all sorts of things. That is not something that is out of the way. Indeed, there is a Question tabled on the Order Paper tomorrow about which the Minister may be aware. It relates to land which was sold off and which we believe, without adequate protection, could become an extremely serious matter as regards certain parts of Glasgow. We shall deal with that tomorrow. It is the kind of thing about which we are worried. We are worried that a local authority could be paying debt charges for land or property which is owned by someone else.

I have no reason to doubt the Minster's understanding of the matter. I just happen to think that he has got it wrong. I am also, sadly, of the opinion that perhaps even his advisers have taken a way out which saves much trouble at present but which may build up a great deal of trouble for local authorities in the future. However, for all the reasons that we discussed, we shall not be able to do a great deal today. We want the Bill to pass. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 [College development plans]:

Lord Carmichael of Kelvingrove moved Amendment No. 7: Page 17, line 23, at end insert: ("( ) how the college development plan relates to the provision of education in the area in which the college is situated.").

The noble Lord said: My Lords, the amendment deals with a provision which strikes me as being a blindingly obvious commitment by any college which is established. It would ensure that college development plans cohere with overall education provision in the area. In Committee, the noble Lord, Lord Strathclyde, indicated that he was puzzled that the amendment was tabled as the insertion of Clause 22 had been welcomed on Report in another place.

We also welcome Clause 22. But we would argue that the amendment strengthens the clause which was introduced at short notice on Report in another place. We know that sometimes amendments which are introduced at short notice seem good at the time, but in the cold light of day it can be seen that they need a certain strengthening. The Minister indicated in Committee that the amendment would cause confusion as there is an obligation under Clause 12(1) for boards of management to, have regard to the provision of education in the area in which the college is situated".

The amendment seems to complement that clause rather than oppose it. Clause 12(1) places an obligation on boards to have regard to the provision of education in the area in which the college is situated. The amendment supports that aim in that college development plans would be required to indicate—the college would not need a seal of approval from the LEA—how the college was dealing with its obligations under Clause 12(1). It is not just a question of the college authority merely saying that it had dealt with the matter; it would have to explain how it believed its development fitted in with the general education requirements in a wider sphere within the area. We believe that that is a strengthening of the clause; in other words, even at this late hour we are trying to be helpful to the Minister. I beg to move.

Lord Addington

My Lords, I support the amendment. It is a sensible addition to a sensible clause. The whole of further education provision should be looked at, and to lay down how a college fits in surely cannot hurt the Bill: it will probably strengthen it. In relation to previous amendments the noble Lord mentioned the interaction between colleges. He mentioned higher education colleges. There are school sixth form colleges and higher education colleges. There will always be a level of interaction. An amendment such as this would only strengthen the position by requiring information to show how all the types of education fit together.

Lord Strathclyde

My Lords, I said in Committee, when we considered a similar amendment, that the provision sought already exists in the Bill. The noble Lord, Lord Addington, said Clause 12(1) was excellent. He also said that the amendment was excellent, but I shall explain why it does not fit into the Bill.

Clause 12(1) places boards of management under an obligation to have regard to the provision of education in the area in which the college is situated. To fulfil that requirement they must consider the provision of education in the wide sense of including school, vocational, community and higher education provision and the extent to which it complements or overlaps with the college's provision.

We see the merits in close collaboration between schools and colleges, but that, of course, can and does take place without direct education authority involvement in the same way as there is no need for a middle-link in college and university collaboration.

I do not think, however, that we should be under the impression that such collaboration is necessarily as well developed as it might be, and that includes school/college links within the existing education authority management regime. More could undoubtedly be done, and we shall be encouraging colleges to maintain and develop such links. That is one reason why Clause 22(4) requires a board in preparing its development plan to consult the education authority for the area. Colleges have much to offer young people and I am sure they will realise, as do universities, the benefits of forging close links from an early stage.

To conclude, the amendment is unnecessary and because it overlaps with the effect of Clause 12(1) could cause confusion, which is why it is difficult to accept the amendment, however well-meant it is. However, given the importance of this issue I am prepared to give an undertaking that guidance given to boards on the preparation of development plans will ask them to highlight how their plans relate to provision of school, community and higher education in their area.

On that basis, I hope that the noble Lord will be satisfied.

Lord Carmichael of Kelvingrove

My Lords, we are obviously in the give-away season. I am delighted that the Minister has found it possible to go as far as he has. I understand that it is impossible to accept the amendment. The support of the noble Lord, Lord Addington, was welcome. I am glad that the Minister has been able to help us to the extent that he has. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 39 [Assessment of quality of education provided by institutions]:

Lord Strathclyde moved Amendment No. 8: Page 29, line 1, leave out ("68") and insert ("70").

The noble Lord said: My Lords, this is a small textual amendment. I beg to move.

On Question, amendment agreed to.

Clause 49 [Change of name by institutions]:

Lord Addington moved Amendment No. 9: Page 36, line 36, at end insert: ("( ) Any designated institution whose name includes the word "university" subject to subsection (5) above is to be treated as a university for all purposes").

The noble Lord said: My Lords, the amendment arises as a result of a discussion in another place where a similar amendment was moved. The amendment effectively provides that any institution whose name includes the word "university" shall be treated as a university. When a similar amendment was moved in another place it was suggested that it was unnecessary because there would be no confusion under the Scottish system. The anxiety was caused by the case of a university college in Lampeter in the 1950s. There is a precedent that gives cause for concern. The new universities in Scotland—Heriot Watt, Strathclyde, Dundee and Stirling—had trouble in getting themselves accepted by the Carnegie Trust because initially they were not thought to be universities. That idea was overridden because they had Royal Charters.

The new universities being created will exist as a result of consent by the Privy Council. The amendment seeks clarification. We want to encourage universities—this is something that the Government seem to want—to obtain funding and support from all available sectors (charitable trusts or business). I beg to move.

5.15 p.m.

Lord Carmichael of Kelvingrove

My Lords, I wish to ask the Minister a question, although it is probably silly of me to do so. The noble Lord, Lord Addington, mentioned other universities. I was interested in the establishment of Strathclyde University which has a Royal Charter. We debated Royal Charters at great length in the other place, and we discovered that there was no such thing until about three months after the university was established.

I am asking for information, because I may have missed something. Will the universities be established under Royal Charter, or is there some other way of establishing them? That may reinforce what the noble Lord, Lord Addington, said. I am asking partly because of the experience we had some 20 years ago in the other place.

Lord Strathclyde

My Lords, the noble Lord, Lord Addington, has raised an important point. As he said, the issue came up in Committee in the other place and the Minister of State explained that part of the reason similar words appear in the English Act is as a form of insurance against the remote possibility of legal challenge arising from the judgment in a 1951 case involving the University College of St. David's, Lampeter. The Government's view was that the parallels between the position then of St. David's and of our Scottish Higher education institutions today were so slight that the words served no useful purpose as far as Scotland was concerned at least.

Indeed, the words are incompatible with the structure of Part II of the Bill, because, as I pointed out in Committee, there is a clear and very important distinction between the existing universities and designated institutions in the Bill. That does not disadvantage the designated institutions in any way; the distinction is necessary because the constitutional and organisational arrangements for designated institutions are different from those for the existing universities and they are provided for in Clauses 44 to 49.

The standing of the "new universities" to be established under the Bill has been compared unfavourably to that of the Royal Charter universities. I believe that view is misplaced. There is no special magic in a Royal Charter, it is merely a means of conferring a title and constituting the body with its necessary powers.

In reply to the point made by the noble Lord, Lord Carmichael, the Bill sets out a new procedure and therefore there is no requirement for a Royal Charter.

Lord Carmichael of Kelvingrove

My Lords, with the leave of the House, that means that we have three types of university in Scotland. We have the ancient universities, the Royal Charter universities and the new universities. At some point a government will need to establish a level playing field—a splendid phrase—or we shall have a hierarchy with the Ivy League and the others. That will surely be bad for education.

Lord Strathclyde

My Lords, the noble Lord makes a good point about hierarchies, but there are already different hierarchies within universities and within departments. The noble Lord is right, there will be three types of university, but I do not believe any of us should worry about those different types.

The institutions will have to meet the criteria set out by the Government before they will be eligible to apply for a university title. They will have to have passed tests related to the quality of the work they do and have been judged competent to award their own taught course and research degrees. They will also have to demonstrate that they meet the criteria related to the scale and breadth of their activities. By all these means, they will have demonstrated that they are eligible to use the university title. In other words, they will have what it takes to be a university. That does not mean that they have to be organised on the same lines as the existing universities. The important point is that they have the essential characteristics of universities as they relate in particular to activities and powers.

Accordingly, we see no reason why the new universities should not be given parity of treatment with the existing universities, whether ancient or modern. I hope that that is a full explanation to the noble Lords.

Lord Addington

My Lords, that answer was full and covered most of the points that were raised. It was just a technical procedure, guaranteeing the status of the universities under this clause, so that they would be just as good.

I believe that the Government are effectively saying that if the validity of the new institutions such as universities were challenged—and I hope no one would challenge it—they would correct anyone who makes such a challenge. Is the Minister saying that? He nods his head, so I feel able to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 54 [Directions]:

Lord Simon of Glaisdale moved Amendment No. 10: Page 37, line 42, leave out subsection (2).

The noble and learned Lord said: My Lords, I beg to move Amendment No. 10, which has been grouped with Amendments Nos. 11 and 12. However, the latter amendments raise quite separate issues and I shall move Amendment No. 11 separately, speaking also to the consequential Amendment No. 12.

Amendment No. 11 relates to a most important provision which has attracted attention throughout the discussion of both this Bill and the English Bill: namely, the power of the Secretary of State to give directions to the funding council. I believe it is right that, on both the Scottish Bill in the other place and the English Bill in your Lordships' House, consideration was directed entirely to Clause 54(3)—in other words, towards the provision that directions can be institution-specific. That was seen throughout as a threat to academic freedom. The breakthrough took place on the English Bill in your Lordships' House when the power to make institution-specific regulations was cut down to the form that now appears in subsection (3).

However, to my surprise, when I was going through both Bills, I could find no explanation about the equally important power under subsection (2). This confers power on the Secretary of State to give general directions to the funding council. It seems to me that even at this late stage it is important to have a ministerial statement as to the general directions, which are potentially of great importance. I do not believe that one could quarrel with those that I envisage, but I am by no means certain that they cover the whole ground. I therefore put down this amendment. I should be grateful if the Minister could say under what circumstances he envisages general directions to be given to the funding council; the nature of those directions and why it is important for the Secretary of State to have that power. I beg to move Amendment No. 10.

Lord Strathclyde

My Lords, of course it is always a pleasure to listen to the noble and learned Lord, Lord Simon of Glaisdale, on this subject. He is a great expert on it. I understand that he has decided to move Amendment No. 10 separately and we shall revert later to the other amendments which were originally in the group.

The noble and learned Lord has returned to the charge that he set out at Committee stage. He taxed me on institution-specific directions, or at least it was those directions with which my reply was concerned.

Lord Simon of Glaisdale

My Lords, I do not believe that I made myself clear. This is not the amendment that I moved in Committee. That was Amendment No. 11. I should be grateful if the Minister could speak to the general direction, not the institution-specific directions.

Lord Strathclyde

My Lords, I was getting to that, I was simply explaining that it was at Committee stage that the noble and learned Lord and I discussed the institution-specific directions. This time, he has moved the amendment on the general direction-making power. That is understood. However, the arguments are substantially the same. I have little to add to the remarks that I made at Committee. It is difficult to find anything new to say on the subject. After all, the debate on affirmative versus negative resolution procedure must have taken place at some stage during the proceedings on every Bill in modern times.

Essentially, the power to make general directions to a non-departmental public body is a commonplace feature of legislation these days, reflecting modern approaches to financial and ministerial accountability. Such powers are often not subject to any parliamentary scrutiny at all, but in this case they are so because of the concern about the possible effect on academic freedom of the institution-specific power, not the general power.

However, both types are there to deal with unpredictable contingencies. As the Minister of State at the Scottish Office said in the other place, what we are dealing with here is a form of disaster insurance. The power to attach conditions to grant under Clause 42 deals with the general case and the power of direction with the unforeseen exceptions.

I hope that that is sufficient and that the noble and learned Lord will accept the explanation and therefore withdraw his amendment.

Lord Simon of Glaisdale

My Lords, I am sorry to say that it is quite insufficient. The Minister has spoken to the next amendment. He referred to the affirmative and negative resolution procedure, which has nothing whatever to do with this amendment. He then quoted the Minister of State in another place. But what the Minister of State was directing his remarks to was the institution-specific power in the next subsection, subsection (3).

I must press the Minister to face the fact that he is seeking wide powers of ministerial direction to the funding council which have been instituted between the Secretary of State and the institutions of higher education. I must press the Minister to say what kind of general directions are envisaged and why it is important that the Secretary of State should have them. Those are the questions. I should have thought that it was quite simple to answer them. However, the answer that the noble Lord found in his brief is the answer to the next amendment and not to this one.

5.30 p.m.

Baroness Carnegy of Lour

My Lords, before my noble friend replies to the noble and learned Lord, I should say to the noble and learned Lord that the position of "arm's length bodies" spending large amounts of taxpayers' money is well understood in Scotland. There are many non-governmental bodies in Scotland that spend a lot of money. As Scotland is a rather small place people follow the fortunes of those bodies more closely than is the case with people south of the border.

When the Scottish universities discussed this matter with my honourable friend in another place—I also discussed the matter with him—it was well appreciated that this was not a threatening provision at all. I do not have the precise types of direction in front of me but I know that they have been discussed. I hope that the noble and learned Lord will not be too anxious about the effects of this clause in Scotland as I believe it has been accepted all round. There is no great concern. The universities are satisfied with it now and they have written to me to say that they are satisfied. I expect they have also written to the noble and learned Lord. I do not think that the noble and learned Lord should be too anxious about this clause. Having said that, I know that my noble friend will wish to reply to the noble and learned Lord.

Lord Strathclyde

My Lords, I am somewhat at a loss to know how to answer the accusation of the noble and learned Lord, Lord Simon of Glaisdale, that I have not answered him fully. I have gone as far as I possibly could. However, perhaps I could take up one point which the noble and learned Lord mentioned about the Minister of State in another place. When he was talking about these powers he called them a form of disaster insurance. He was talking not just in respect of the specific powers but also in respect of the general powers.

The general power of direction is intended to deal with unpredictable problems which may arise in the future. I know that the noble and learned Lord, Lord Simon of Glaisdale, recognises that this is a fairly common provision these days. I am grateful to my noble friend Lady Carnegy for explaining the position of the colleges and their support for this Bill. I hope the noble and learned Lord does not feel that I am being evasive and that my answer is full enough to allow this provision to go through.

Lord Simon of Glaisdale

My Lords, this matter continues to be profoundly unsatisfactory. I have no quarrel with this power. I agree with the noble Baroness that it has been recognised generally, both in relation to the legislation for England and for Scotland, that it is reasonable that the Secretary of State should have a general power. What I wanted to know was in what circumstances that would be exercised. The noble Baroness at any rate gave the beginning of an answer that the Minister might have given; namely, that we are concerned with large sums of money. I thought that this general power would be exercised in circumstances where large sums of money were involved; for example, a direction could be given to the funding council—in view of the large amount of money that is available to it—that more medical facilities would be required. But that is only the beginning. That seems to me to be quite unobjectionable.

What I want to hear from the Minister is in what other circumstances a general power might be exercised. It is simply not good enough to come to Parliament and ask to be given general, unspecified powers to give directions to the funding council which is responsible for dispensing the large amounts of money to which the noble Baroness referred. It is not good enough to give general directions to the funding council without telling Parliament the circumstances in which the powers will be exercised and why it is important that the Minister should have those powers. I am afraid that I shall not withdraw the amendment until the Minister answers the questions that I have asked which seem to me to be perfectly reasonable ones. The Minister knows that I wish him well and he knows the reason for that.

Lord Campbell of Alloway

My Lords, this is an unrealistic request that the noble and learned Lord, Lord Simon of Glaisdale, is asking—

The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness)

My Lords, I hope that my noble friend will forgive me, but I point out that we should bear in mind that we are on the Report stage of this Bill. We ought to follow the proper procedures.

Lord Campbell of Alloway

My Lords, am I out of order to speak?

Noble Lords


Lord Strathclyde

My Lords, as we are on Report I understand that I may speak with the leave of the House. I shall speak on that basis. The noble and learned Lord, Lord Simon of Glaisdale, makes an accusation that I have been unable to explain under what circumstances it might be necessary to use the powers that we are discussing. It is precisely because that situation is unforeseen and we are discussing a contingency requirement that it is difficult to be entirely specific in answering the noble and learned Lord.

One key reason for the power is that the report of the review of the University Grants Committee chaired by the noble Lord, Lord Croham, recommended that the Secretary of State should have such a power because he is ultimately responsible to Parliament for the Government's funding policy. As is the case with research councils, the Secretary of State requires a reserve power to issue directions to the council if need be. We would expect such a power to be rarely used. I have tried to give comfort to the noble and learned Lord. I am not sure that I have been entirely successful so far but I hope that he will accept that these powers are required solely in the light of an unpredictable contingency.

Lord Simon of Glaisdale

My Lords, I do not think that I need the leave of the House to reply to the debate. I am bound to say that this matter continues to be quite unsatisfactory. If I may say so, I well knew what the Croham Committee recommended. I have never quarrelled with the Minister having general powers. What I, your Lordships, and obviously the noble Lord, Lord Campbell of Alloway, wanted to know was in what circumstances those powers would be exercised, why they were required and why it was important to have them. We have had no answer at all. All we have is the completely negative reply that the Minister is asking for general, wide powers to be exercised in circumstances which cannot be envisaged. I venture to give him one circumstance which could be envisaged; namely, a direction that medical facilities should be extended. The Minister did not even take that up.

We now have on record that no answer will be given. The Minister is seeking for Parliament general powers and refuses to say in what circumstances they will be exercised, merely saying that they will be exercised in unforeseen circumstances. I leave it for anyone reading the record to determine how satisfactory that is.

I have no alternative but to withdraw the amendment. I do not wish the Bill to founder; I wish to see it go through. However, in withdrawing the amendment I must not be taken—and I doubt whether I shall be taken—as thinking that the answer given from the Dispatch Box is in the least satisfactory. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Simon of Glaisdale moved Amendment No. 11: Page 38, line 6, at end insert: ("( ) No order under this section shall have effect until approved by a resolution of each House of Parliament.").

The noble and learned Lord said: My Lords, in moving Amendment No. 11 I shall speak also to Amendment No. 12, which is entirely consequential. Amendment No. 11 seeks to make the direction-making orders under Clause 54 subject to the more effective affirmative resolution procedure rather than, as under the Bill at the moment, the ineffective negative resolution procedure.

I considered this an essential amendment even before I moved the previous amendment. We now find that there is a general direction power under subsection (2), which is defended on the grounds that it will be needed in exceptional circumstances, but circumstances which cannot now be disclosed and apparently cannot even be envisaged.

When I moved the amendment in Committee I read out to your Lordships the recommendation of the Joint Select Committee on Delegated Legislation of 1972–73. I shall not delay your Lordships by doing so again; it can easily be summarised. The Joint Select Committee said that the affirmative resolution should be used for important matters and went on to make clear what was meant by "important" or "substantial." It was anything which was not trivial, consequential or involved tidying up. The essential word here is "trivial." Anything which cannot be dismissed as trivial should be subject to the affirmative resolution procedure.

Faced with that quotation the Minister swallowed hard. He could not quite bring himself to say that the matter was trivial but said that it was verging on the trivial. If it merely verges on the trivial it falls on the affirmative resolution side of the divide. Even if it falls only marginally on that side of the divide, it cannot possibly now be argued that that power is other than important. The last resort power under subsection (2) is a general power to be used as a matter of last resort in circumstances which cannot yet be disclosed and which are not yet envisaged. Is that not an important power?

The institution-specific power under subsection (3), as it has been narrowed down in your Lordships' House, is also a last resort power for use in the case of severe mismanagement of an institution. It has been described in both Houses as a last resort power, one to be used when the funding council and the institution have gone completely off the rails—circumstances so extraordinary that it is not envisaged that the power would be used at all. Is that not important? Is it really to be dismissed as trivial? Is it to be dismissed even as verging on triviality? I beg to move.

5.45 p.m.

Lord Strathclyde

My Lords, in replying to the amendment I hope that I can justify the Government's position better than I have in the case of previous amendments moved by the noble and learned Lord, Lord Simon.

In the circumstances which the noble and learned Lord described, it would not make sense to shackle the power to the potentially lengthy and cumbersome affirmative resolution procedure. The 1988 Act did not do that; neither does the Further and Higher Education Bill of 1992.

The House recognises that by convention this House would not normally reject a negative order. Equally, it would not normally fail to confirm an affirmative order. Therefore, in practical terms, from the point of view of this House there is not a great deal to choose between the two.

Noble Lords have placed great importance on bringing the academic freedom provisions in the Bill into line with the corresponding provisions for England and Wales. That also was in the end the strong wish of the Scottish university principals. The Government accepted the wish of the House and I made the necessary changes in Committee. Having committed myself to that policy of consistency it would be very difficult to reverse it in the light of the amendments proposed by the noble and learned Lord, Lord Simon.

The noble and learned Lord repeated the points that he made in Committee on the question of the nature of the power itself and its appropriateness to the different classes of legislation available. Following the noble and learned Lord's remarks I revisited the second 1972–73 report of the Joint Select Committee on Delegated Legislation, as no doubt did other noble Lords. Paragraph 43 describes a fourfold classification of affirmative powers. The noble and learned Lord attempted to persuade us that the power of direction in Clause 54 was a class one power, an important power, a power, the exercise of which will substantially affect provisions in Acts of Parliament, whether by alteration of their effect, or by increase or limitation of the extent or duration of their effect, or otherwise".

Lord Simon of Glaisdale

My Lords, did the noble Lord also look at the other summing-up provision to which I referred last time, namely paragraph 77 on page 98?

Lord Strathclyde

My Lords, I certainly read a substantial amount of it. Perhaps I could finish the point that I was trying to make. What we are dealing with here is not a class one power but, if anything, a class four power, namely: a miscellaneous or general class comprising powers the exercise of which has for a variety of reasons been thought to involve considerations of some special interest". Accordingly, on that view, the noble and learned Lord's test of triviality or substantiality for negative or affirmative resolution is not apt. Instead, as paragraph 46(4) says of class four powers: Research cannot be of much help here as importance is a matter of political judgement". It is with that point that I have a great deal of sympathy. In my judgment the negative resolution approach is probably the right one. It was the approach that was adopted in the 1988 Act. More recently, in what is now, as I said, the Further and Higher Education Act 1992 and in the words of the Joint Select Committee in paragraph 45 of the report, I feel that affirmative resolution might risk a needless consumption of parliamentary time.

I know that the noble Lord has made great efforts to explain exactly why he feels that this amendment would be appropriate for this particular Bill. But I wonder why Parliament has not sought to include the powers in the other Acts that I mentioned. I hope that the noble Lord feels satisfied that I have done my best to explain to him what is meant by these powers and why we are introducing them in this procedure.

In the light of that explanation I hope that he will be able to withdraw his amendment.

Lord Simon of Glaisdale

My Lords, the noble Lord said, first, that this point falls under the second head of what the Joint Select Committee recommended. But it does not. It falls under the first head; namely, whether it is important or whether it is merely trivial. Having got no further last time than saying that it verges on the trivial, I cannot blame him for trying to evade that head of distinction raised by the Joint Select Committee.

Secondly, he said that it is a negative power in the English Bill. So it is. But the noble Lord is responsible for this Bill and he must justify this power in the light of the Joint Select Committee's recommendation which was accepted by both Houses and from which it is not open to the noble Lord to depart. He has to accept it in relation to the Bill for which he is responsible.

The third comment of the noble Lord was that in the 1988 Bill it was no more than a negative resolution procedure. So it was. But that was part of a quid pro quo. The critics of the Bill dropped the agitation for the affirmative resolution procedure when the Government conceded that the safety catch should be fitted to the barrel of this gun: the power to give directions to the funding council. It was a quid pro quo.

This matter must now be determined in relation to this Bill. It is a question of parliamentary control of ministerial order. Obviously, I shall not get any further. I do not wish the Bill to founder. If an amendment were carried against the Government that would be the effect. I do not doubt that noble Lords would so carry it. I see that the noble Lord the Leader of the House has returned to see that the Government have a safe majority. I hope that they have a majority because I wish this Bill well. However, in asking leave to withdraw the amendment I yield to force and not to argument. I beg to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 60 [Regulations and orders]:

[Amendment No. 12 not moved.]

5.55 p.m.

The Earl of Caithness

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Further and Higher Education (Scotland) Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Lord Strathclyde

My Lords, I beg to move that this Bill be now read a third time.

The Further and Higher Education (Scotland) Bill represents a landmark in the history of Scottish education. It has been widely recognised as such and has consequently received a good deal of support from all quarters. We have had debates of high quality in this House. I pay tribute to noble Lords who have worked hard to subject the Bill to such a thorough scrutiny, particularly the noble Lords, Lord Carmichael of Kelvingrove, and Lord Addington. I am also very grateful to my noble friend Lady Carnegy for her help and advice during the passage of the Bill.

Many noble Lords have brought to the proceedings considerable experience of further and higher education in Scotland and further afield. Many aspects of the Government's policies have been clarified and refined during our debates. We have been able to make improvements to the provisions in a number of key areas. The result is that we now have a Bill which will increase skill levels in the Scottish workforce in order to increase the growth and potential of the Scottish economy. That does not only mean training for school leavers; it also means continuing training and retraining for adults already in the workforce. For the first time all higher education institutions in Scotland will come within the ambit of the Secretary of State. That, together with his new responsibilities for further education, will ensure a coherent and co-ordinated system of further and higher education, as we move into the 21st century.

The theme running throughout the Bill is one of opportunity —opportunity for Scots of whatever age to improve themselves through training and education. It is predicated on the principle that places in higher and further education should be available for all those who wish to take up the opportunities and are able to benefit from them. Only by expanding tertiary education will we continue to remain an advanced economy. We shall achieve that goal and create the means of ensuring our national prosperity in the next century through these reforms.

This Bill will release and focus the energies of principals and their staff. It means freedom to manage and expand further and higher education in Scotland. I commend the Bill to the House.

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

Lord Carmichael of Kelvingrove

My Lords, I thank the Minister for his kind words and for the efforts that he has made throughout the passage of the Bill to accommodate what we on this side of the House believe to be the anxieties of the people of Scotland. By and large we believe that it is a handy Bill. To say that it is a landmark Bill in terms of Scottish education puts it rather high. But it is certainly an advance. We are particularly pleased that higher education will be made available to more people. We are also pleased that in his short remarks the Minister stressed the fact that the Bill will give opportunities to people of whatever age in Scotland.

Perhaps I speak chauvinistically, but I believe that Scotland has possibly a higher percentage of people who realise that life does not finish academically at school age and that they can move on. This Bill may help them.

I am also grateful to the noble Baroness, Lady Carnegy, and the noble Lord, Lord Addington, for their efforts on this Bill. The House is always pleased to hear the noble and learned Lord, Lord Simon of Glaisdale, and his very sharp comments on Bills in his attempts to improve them.

The Minister has handled the Bill with great skill. We all look forward to seeing him in the next Parliament, sitting perhaps on the other side and looking at legislation that has been put forward by a different Administration. That legislation perhaps will be seen rather more as landmarks than the Bill which the House has put to bed this evening. We have all tried to be helpful in a common cause. Therefore I am pleased to see the Bill on the statute book.

6 p.m.

Lord Addington

My Lords, I rise to thank the noble Lord, Lord Strathclyde, who has been helpful and constructive during the passage of the Bill. We have worked towards improving the Bill and I believe that we have done so. I thank too the noble Baroness, Lady Carnegy. When I reached a minefield once or twice she put me right. The noble Lord, Lord Carmichael, took the main brunt of the debate. I am glad that he was so polite about my supporting role.

The words of the noble and learned Lord, Lord Simon of Glaisdale, will ring in the ears of the noble Lord, Lord Strathclyde, for some time. If ever I find myself drawn against the noble and learned Lord, I shall make sure that I have done every bit of my homework.

The Bill improves the situation in Scotland. It gets rid of the ridiculous binary divide—and not before time. I hope that it will contribute to the encouragement of Scottish higher education. I speak as a zealous convert to it. As the noble Lord, Lord Carmichael, said, Scottish higher education has always provided one of the driving forces and principal examples for the development of higher education in the United Kingdom and indeed the remainder of the world.

Baroness Carnegy of Lour

My Lords, I agree with the noble Lord, Lord Carmichael, that the Bill is a landmark in Scottish education. One could also say that a new chapter is opening. The local authorities are naturally sorry to lose the further education colleges. However, as times change I believe that the new system will work extremely well. I am sure that local authorities will have frequent contact with colleges because, as the noble Lord and my noble friend on the Front Bench said, the colleges remain part of the education pattern. I am sure that they will flourish under the new autonomy. We shall follow their fortunes with interest.

The new funding council in Scotland for the higher education institutions is a landmark. I am sure that it will develop its method of working and its relationship with the Scottish Office with care and vision.

I express my particular gratitude to my noble friend Lord Strathclyde and to the Minister of State in another place for the way in which they handled the issue of yet another amendment to the so-called academic freedom provisions. The Bill was amended in another place, it was believed to the satisfaction of all concerned. That turned out not to be so. The Bill had to be amended again. I found it encouraging that the Government listened hard to what the universities said and provided what was wanted. We now have the same provisions as those which exist in the Bill for England. It is unusual for Scots to want that, but we wished it on this occasion.

The noble and learned Lord, Lord Simon of Glaisdale, had another go at his aspirations for the handling of orders in Parliament. He did so admirably. I thought that he was a little tough on my noble friend Lord Strathclyde, but that probably did my noble friend no harm. We now have a procedure that is no less speedy than that set out in the English Bill. That will give satisfaction in Scotland. I am sure that the noble and learned Lord, Lord Simon, will one day prevail with regard to that aspect. I am very glad that he is as keen on the Bill as I am and that he has ensured that it will not fall by the wayside at this stage.

I thank everyone concerned for the way that they have co-operated with my noble friend on the Bill. I am sure that the future of further and higher education in Scotland will be exciting.

Earl Russell

My Lords, I endorse what the noble Baroness, Lady Carnegy, said about the academic freedom clauses in the Bill. It is an honourable settlement that is very welcome.

I thank the Minister. I thank too the noble Baroness for the effort that she has put into the matter. I am glad about the outcome.

Lord Simon of Glaisdale

My Lords, as an interloper into debates on Scottish education, I felt it necessary at the outset to ask for the indulgence of your Lordships. Now that the Bill departs from us, I express my appreciation of the way that indulgence has been shown and add how much I have enjoyed and learned from the debates to which I have listened.

It would be an impertinence if I mentioned Members of your Lordships' House who have taken part in the debates. That has already been done. At the outset I explained why it was a particular privilege to take part in discussion of a Bill that was piloted by the noble Lord, Lord Strathclyde. Although we have crossed swords on academic freedom and on parliamentary control, he has successfully piloted the Bill to the very last stage. It would be surprising if it were now defeated. That has given me pleasure, and I congratulate him and join in the felicitations that others have paid.

On Question, Bill read a third time.

Lord Strathclyde

I beg to move that the Bill do now pass.

Moved, That the Bill do now Pass. (Lord Strathclyde.)

On Question, Bill passed, and returned to the Commons with amendments.