COMMONS AMENDMENT (Hansard, 23 June 1998)

§ Lord Whitty
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 48. In doing so, I should like to speak also to Amendments Nos. 49, 56, 66, 67, 69, 70, 71, 92 to 95, 98, 112 to 117, 144 and 145.
This is a fairly large group of amendments, all of which relate to the new student support arrangements which we shall be introducing in the coming autumn term. The amendments do not deal with the principles and substance of those new arrangements; we look 137 forward to the opportunity to debate that aspect when we come to Amendments Nos. 64 and 123 a little later on. The amendments in this group relate purely to the way in which the new arrangements will be administered and to a handful of relatively minor technical issues. I shall deal briefly with the technical amendments first.
First, Amendment No. 48 will enable the Secretary of State to designate courses at private institutions as eligible for support through administrative act rather than regulations, as now. Secondly, Amendment No. 49 will ensure that where payment of a grant or loan is discretionary—for example, in the case of hardship loans—the body responsible for determining entitlement can exercise a broad discretion rather than having to adhere to detailed criteria laid down in regulations. Thirdly, Amendment No. 112 will enable the regulations governing the student loans scheme in Scotland to deal appropriately with borrowers who are declared bankrupt or are sequestrated. Finally, Amendments Nos. 115 and 117 are minor drafting amendments which simply tidy up the wording of the Bill. All of these amendments are purely technical.
I turn now to the more substantive amendments, most of which have equivalent amendments for Scotland. In this context, the group of amendments is larger than it might otherwise be because of having to repeat the arrangements for Scotland.
Amendment No. 67 and Amendment No. 93 relating to Scotland clarify the Secretary of State's powers to transfer and delegate the powers given to him in respect of student support. They replace and improve upon the provisions already made in the Bill. Members of your Lordships' House will note that the Bill makes provision for the Secretary of State alone to make grants or loans to students. This is different from the current student support legislation, which gives the Secretary of State powers to make arrangements for the making and collection of loans and, in England and Wales, places duties on LEAs in respect of mandatory and discretionary awards. A variety of bodies will be involved in the administration of the new loans scheme, including local education authorities, higher education institutions, the Student Loans Company and the Inland Revenue. Amendments Nos. 67 and 93 accordingly provide for these bodies to exercise powers instead of, or on behalf of, the Secretary of State.
In particular, these new provisions allow functions to be transferred to local education authorities and higher education institutions, which, as independent bodies, already have distinct responsibilities for administering aspects of the existing awards and loan schemes. Functions will not be transferred to other bodies but delegated. This means that the Secretary of State will retain overall responsibility for those functions and will himself be subject to judicial review. We believe that this is more appropriate in the case of a body such as the Student Loans Company, which is wholly owned by two Secretaries of State, or the Inland Revenue, which will be collecting loan repayments on the Secretary of State's behalf.
138 The new provisions also enable the Secretary of State to establish an appeals procedure in respect of functions which are transferred or delegated. We are considering the details of the appeals mechanism, but I am happy to repeat the undertaking that my honourable friend made in another place that a right of appeal will be put in place in relation to the collection of student loans.
These two amendments also provide for the Secretary of State to make payments to bodies to which functions are transferred or delegated or which are appointed to hear appeals, either to meet the costs of making grants or loans or as payment for administering the scheme.
Amendments Nos. 56 and 98 delete the references to government departments in Clauses 19 and 24 of the Bill. References to government departments are superfluous in this context since they would anyway be covered by the references to "other persons or bodies". More importantly, we do not envisage that the regulation-making power in Clause 19(5) and the equivalent Scottish provision will be used to place duties on government departments—in practice, the Inland Revenue. Instead, the relevant functions will be delegated to the Revenue using the powers which I have just described. This will mean that the Secretary of State remains ultimately accountable for the actions of the Revenue in relation to loan collection.
Amendments Nos. 92, 94, 113, 116, 144 and 145 also relate to transfer and delegation and are consequential on the previous two groups.
The next substantive group is Amendments Nos. 69 and 70, which are necessary to ensure that the existing administrative arrangements can be adapted to accommodate changes in the pattern of student support. Our proposals to replace grants with loans and to introduce means tested support for fees have implications for those bodies which are currently involved in managing the system. As I have already mentioned, in England and Wales this means LEAs, the Student Loans Company and also a small central unit within the Department for Education and Employment. In Scotland student support is administered by the Student Loans Company and the Student Awards Agency for Scotland.
We shall need to consider how functions should be allocated between these bodies in the most efficient way in order to ensure a smooth transition to the new system. For example, it is possible that as time goes on, the central unit, which was established mainly to administer means testing arrangements for EU students, might take on other responsibilities. The Bill in its previous form provided for existing student support functions to be transferred, but only in association with the repeal of the existing student support legislation. Given that we intend to repeal the existing legislation this year—albeit with savings provisions—these amendments are necessary to allow functions to be transferred at different times in the future as the regime changes. Amendment No. 71 deletes the existing provisions which Amendments Nos. 69 and 70 replace. Amendments Nos. 95 and 114 make similar provision for Scotland, while reflecting the different administrative arrangements that already exist there to which I have already referred.
139 We consider that these amendments will be necessary for the smooth administration of this scheme. They do not raise issues of substance.
Moved, That the House do agree with the Commons in their Amendment No. 48.—(Lord Whitty.)

§ Lord Brightman
My Lords, can the Minister explain the exact effect of Amendment No. 48? That amendment seeks to, leave out line 2 and insert ('which are designated for the purposes of this section by or under the regulations.')". I have in mind Clause 29 which defines "prescribed" as meaning prescribed by regulations. It also provides that "regulations" means regulations made by the Secretary of State under the Bill. It would seem to me therefore that Amendment No. 48 does not in fact do anything at all.

§ Lord Whitty
My Lords, I hope my interpretation is correct. The amendment removes the requirement for prescription to be under regulations. It allows the Secretary of State to designate clauses by administrative action rather than by regulation, therefore providing additional flexibility.