Training and Enterprise Councils (Hansard, 30 April 1996)

§ The Minister of State, Department for Education and Employment (Lord Henley)
My Lords, the three-year licensing process is supporting continuous improvement in training and enterprise councils. To be awarded a licence a TEC must meet rigorous criteria across all that it does. That includes assessment of the TEC's corporate planning and indicators of its strategic impact, a corporate programme and internal capability. Sixty-four TECs have already been awarded licences. The Government's intention is to contract only with licensed TECs after 1997.

§ Lord Dormand of Easington
My Lords, does the Minister agree that one of the most unsettling and worrying aspects of TECs at the moment is that their legal status is not quite clear? If Oldham TEC wins 1468 charitable status arising from its court case with the Inland Revenue, would it not make some of the activities of the TECs illegal? Perhaps equally important, would it not affect the liabilities of members of TECs? In those circumstances, is it not likely—in fact, highly probable—that some members will cease to do work for TECs?

§ Lord Henley
My Lords, the noble Lord is right to draw attention to the uncertainty following the case for charitable status which involved Oldham TEC. I understand that the Inland Revenue has appealed to the High Court the decision of the special commissioners of Inland Revenue to grant Oldham TEC charitable status for tax purposes. At the moment, all I can say to him is that the department is considering with the Charity Commission and the TEC National Council the implications for TECs following that decision if the Inland Revenue fail to win at a higher court.

§ Baroness Turner of Camden
My Lords, is it a fact that the application for charitable status came about because the TEC in question was concerned about financial resources and felt that obtaining charitable status would improve the financial resources available? Is it also true that TECs constantly seem to have to battle with the Treasury for adequate resources? Furthermore, how do the Government deal with what appear to be varying degrees of effective performance among the different TECs? How is it intended to obtain consistency of performance?

§ Lord Henley
My Lords, it is not for me to guess the motive behind Oldham TEC's decision to take this matter to the courts. On the wider question as to whether TECs are adequately funded, I do not accept what the noble Baroness said. Overall, TECs' budgets this year, 1996–97, are set to increase. That is a sign of Her Majesty's Government's confidence in TECs. Obviously, we want to make sure that all TECs perform adequately. That is why we introduced the licensing process and why we intend to continue with it.

§ Lord Gisborough
My Lords, in view of the success of the licensing process, can the Minister say what percentage those 64 TECs represent? What help will be available to other TECs which are less likely to reach the criteria and for how long may that help go on?

§ Lord Henley
My Lords, I cannot help the noble Lord with the precise percentage of those which have not been licensed. My arithmetic is not up to it at the Dispatch Box. I can assure him that 64 out of 74 TECs have already been licensed. That leaves 10 TECs waiting to be licensed by next year. Certainly, we shall offer what help we can to those 10 TECs to go down with the licence process. I hope that the TEC National Council will do the same. Certainly, we hope that all will be licensed by next year.

§ Lord Rochester
My Lords, does the noble Lord recall that the policy director of the TEC National Council criticised the bureaucratic procedures under which TECs have to operate? Those procedures were said to be a natural consequence of allowing technocrats, distant from 1469 the field, to design systems of operation in environments which they had not experienced and did not understand. How does the Minister respond to those strictures?

§ Lord Henley
My Lords, I am aware of those criticisms. They were looked at by the Employment Select Committee in another place in its recent report on the work of TECs. But, as the committee's report emphasises, there is a balance to be struck between maintaining proper accountability in expenditure of public funds and ensuring that the detailed oversight of checks is not overly bureaucratic. The Government aim to bring greater trust and clarity into their relationship with TECs. I believe that there has already been considerable progress in that area.

§ Lord Hylton
My Lords, can the Minister say how many councils have so far gone bankrupt? I know of one case in south London.

§ Lord Henley
My Lords, the only TEC which was forced to go into liquidation was the South Thames TEC. We believe that that was not as a result of fraudulent claims, as alleged by some, but was due to its own inadequate financial control systems. We trust that with the improved measures and licensing procedures that have been introduced that will not happen again.

§ Lord Peston
My Lords, these councils are called training and enterprise councils. Can the Minister say where the enterprise comes in? What do they do that encourages enterprise? In particular, if they are encouraging enterprise and wish to go bankrupt, should not they be allowed to do so?

§ Lord Henley
My Lords, the councils work at a local level in partnership to bring about and encourage economic development of their local area. They assist in driving forward national targets for education and training and also help deliver the national training and enterprise programmes of Her Majesty's Government. They are training and enterprise councils, and we believe that they do their job well.

§ Lord Peston
My Lords, I do not want to press the Minister too much. However, the word "enterprise" has a definite meaning within the market mechanism and it is not about training. It involves enterprise, which is about risk-taking. That is why I should like the Minister to explain what it is that a council can do that encourages such enterprising, risk-taking activity. He has not yet given us an example.

§ Lord Henley
My Lords, I shall be more than happy to arrange for the noble Lord, Lord Peston, to visit one of the training and enterprise councils. I hope the noble Lord will take me up on that offer. I can refer him to a number of good training and enterprise councils in London, or perhaps the noble Lord would like to travel further afield. It may do him good to see some of the rest of the country. I shall be more than happy to arrange 1470 that; I am sure too that the TEC involved will be more than happy to show the noble Lord exactly what it can do to encourage enterprise and training.

§ Lord Dormand of Easington
My Lords, the Government have been encouraging the amalgamation of TECs and chambers of commerce. However, does not the Minister agree that the present position is so uncertain that the Government should be abandoning that situation?

§ Lord Henley
My Lords, I do not accept that. There is a case to be made for TECs, where appropriate, to merge with their chambers of commerce if they and their chambers of commerce believe something can be gained from that. But that is a decision for individual TECs and chambers to pursue if they believe it to he appropriate.