John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland & The Deepings, Conservative)

I beg to move amendment 240, in clause 58, page 38, line 5, at beginning insert

‘Under guidance from the Chief Executive of the Skills Funding Agency,’.

Christopher Chope (Christchurch, Conservative)

With this it will be convenient to discuss the following: amendment 256, in clause 58, page 38, leave out lines 6 to 12 and insert—

‘(a) local education authorities for the purposes of their functions in relation to the education or training of persons—

(i) who are compulsory school age but under 19, or

(ii) who are aged 19 or over but under 25 and are subject to learning difficulty assessment;

(b) persons providing or proposing to provide education or training for such persons in pursuance of arrangements made by local education authorities in the discharge of those functions.’.

Government amendment 308.

Amendment 241, in clause 58, page 38, line 11, leave out subsection (b).

Government amendment 309.

Amendment 122, in clause 58, page 38, line 12, leave out ‘such education and training’ and insert ‘subsection (a) (i)’.

Amendment 242, in clause 58, page 38, line 15, at beginning insert

‘Under guidance from the Chief Executive of the Skills Funding Agency,’.

Amendment 243, in clause 58, page 38, line 25, at beginning insert

‘Under guidance from the Chief Executive of the Skills Funding Agency,’.

Government amendment 310.

Amendment 244, in clause 58, page 39, line 1, at beginning insert

‘Under guidance from the Chief Executive of the Skills Funding Agency,’.

Amendment 245, in clause 58, page 39, line 7, at beginning insert

‘Under guidance from the Chief Executive of the Skills Funding Agency,’.

Government amendment 311.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland & The Deepings, Conservative)

I rise conscious of the fact that we are anxious to make progress. We do not want to miss our supper by going on too long. We have had dinner, as the Minister reminded us, but there is time to squeeze in at least one more occasion to wine and dine. With that ambition in mind, I shall try to speak to the amendments as a whole.

The amendments are designed to ensure that the YPLA operates under guidance

“from the Chief Executive of the Skills Funding Agency”.

The amendments are probing, to ascertain why the YPLA funding duties for 16 to 19 education cannot be overseen by the Skills Funding Agency, a body that it is anticipated will deal with 19-plus skills-based education, further education and apprenticeships.

Many witnesses in the evidence sessions of the Committee pointed out that the transition was likely to be long, arduous and costly, and that the resulting structure might not be fit for purpose in any case. The amendment proposes a more streamlined structure, in which the SFA oversees the work of the YPLA, delivering a more coherent line of responsibility and accountability, and easier translation of funding goals. The weakness of the proposed system is that it has three delivery agencies where just one would do. The amendment seeks to do the best that it can to tie the agencies together in terms of their performance and accountability, in an attempt to minimise the impact of the proposed organisational changes and, instead, concentrate on what is good about the existing system.

As Elizabeth Reid of the Specialist Schools and Academies Trust highlighted when questioned about the potential dissolution of the YPLA:

“From a number of points of view, I might not be too relaxed about that. The whole history of planning and providing for the education of 16 to 19-year-olds is quite vexed. Over the last three or four decades, there have been many difficulties.”——[Official Report, Apprenticeships, Skills, Children and Learning Public Bill Committee, 3 March 2009; c. 48, Q123.]

The amendment is designed to minimise those difficulties and ensure that the system runs smoothly for providers, employers and learners. From what they said in Committee, all of them would have sympathy with such an amendment.

Daniel Moynihan from the Harris Federation said:

“A national body that is accountable to the DCSF—a single unit such as the YPLA—will be a high-quality, high-profile body that provides strong accountability, without variation. We are more likely to get that strong accountability and rigour from an organisation such as the YPLA than we are from myriad local authorities.”——[Official Report, Apprenticeships, Skills, Children and Learning Public Bill Committee, 3 March 2009; c. 49, Q127.]

John Lucas of the British Chamber of Commerce said:

“We are very uncomfortable with the state of play of the reform, particularly with the dissolution of the Learning and Skills Council and the introduction of the Skills Funding Agency. We believe that the changes are too bureaucratic and do not address the underlying issues and problems of the education system.”——[Official Report, Apprenticeships, Skills, Children and Learning Public Bill Committee, 3 March 2009; c. 5, Q1.]

As I have said, these are probing amendments designed to test the Government both on why they have not proposed a more efficient and streamlined structure and whether, given the force of argument in this Committee and the opportunity to consider these matters more carefully after a good dinner, they might be minded—even at the 11th hour—to change their mind, listen to the experts and do the right thing.

David Laws (Yeovil, Liberal Democrat)

Not having any intention of returning to supper having had dinner and having an amendment down in this section, I think that I should speak to it  even though the Minister is looking slightly distressed at my intervention, perhaps anticipating a second dinner or even a supper. Amendment 256 seeks to clarify how the YPLA will discharge its duties in the future and who will be in the driving seat when it comes to commissioning. On page 26 of the explanatory notes to the Bill, it says that Clause 40, with which we have already dealt,

“ imposes a new duty on local education authorities to secure that all young people in their area who are over compulsory school age but under 19, and persons aged 19 and over but under 25 for whom a learning difficulty assessment has been carried out”.

The explanatory notes go on to say:

“The Government propose to create a small non departmental body, the Young People’s Learning Agency for England (‘the YPLA’)”—

which we have just been discussing—

“sponsored by DCSF and reporting to the Secretary of State, whose core purpose is to provide the funding to enable local education authorities to fulfil this duty.”

In other words, it is fairly clear from the explanatory notes, that the principal responsibility lies with the local authority. The local authority is the one that is being funded and that will be in the driving seat when it comes to commissioning. However, when we look at clause 58, we can see that it is the YPLA that is mentioned first as having to

“secure the provision of financial resources.”

In the introductory part of the clause, it appears that the YPLA will be in the driving seat in relation to commissioning and providing. Subsection (b) refers to local education authorities which will also receive financial resources for what is described as their functions in relation to education or training. What amendment 256 seeks to do is put local authorities back in the driving seat in relation to commissioning and receipt of funding in the way in which the Government appear to anticipate in their explanatory notes.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland & The Deepings, Conservative)

Could we be clear about the hon. Gentleman’s principal concern? Is it one of duplication or one of confusion? Is he suggesting that because of the way in which the Bill is drafted, both local authorities and this new agency would have overlapping responsibilities? Or is he suggesting that the Bill is clumsily worded and it does not do what the explanatory notes say that it should?

David Laws (Yeovil, Liberal Democrat)

Until I hear from the Minister, I am afraid to say that it is both. I am not sure whether the Bill is deliberately confusing, whether there is a risk of duplication or whether the intention in the Bill as drafted is not rather different from what is in the explanatory notes, because the Bill appears to give more commissioning power and responsibility, in relation to funding, to the YPLA to commission directly, rather than engaging through the locally elected authority, which according to the explanatory notes would be in the driving seat.

Amendment 256 is designed to turn around clause 58 so that it comes into line with the intentions stated in the explanatory notes and to make clear what the distinct roles of the YPLA as a funder and commissioner will be in comparison with local authorities. Is the intention, as stated in the Bill, that the YPLA will have quite a lot of power to commission directly and outside  the local authority control or agreement, or will this body have as one of its prime responsibilities or its prime responsibility the funding of local authorities so that they can discharge those duties? At the moment, the Bill is rather confusing on that point. It would be helpful for the Minister to end that confusion and to clarify the circumstances in which, for example, the YPLA might ignore the wishes of the local authority in discharging its functions under clause 58.

Jim Knight (Minister of State (Schools and Learners), Department for Children, Schools and Families; South Dorset, Labour)

I shall deal first with amendments 240 and 242 to 245. Clause 58 ensures that the financial resources that local authorities need to deliver on their new duties under the Bill are transferred to them from the YPLA. That is the beginning of an explanation, but I will go on at greater length for the benefit of the hon. Member for Yeovil a bit later. These amendments would make all the YPLA’s duties and powers with respect to securing financial resources subject to guidance from the chief executive of the Skills Funding Agency. Together with amendment 239 to clause 57, which we have already discussed, they would mean that the YPLA was set up as part of the SFA rather than as a separate non-departmental public body.

Although I have once before set out the position to the hon. Member for South Holland and The Deepings in respect of the barmy proposition that the YPLA be part of the SFA, I will give it another go. As he knows, the adult skills world is demand-led; the learners’ decisions are very much what is provided for. The SFA will deliver through Train to Gain and a number of other things that have been set out and will be discussed when we reach that part. The situation for FE colleges, which I know he is concerned about, is very different from the planned, commissioned provision, which is what happens on the 16-to-19 side of things. They are very different and the accountabilities for them should be very different.

If we are to make sense of the Education and Skills Act 2008 and the policy to raise the participation age to 17 and then 18 in 2015, it is important that the accountability for nought to 19 should rest with local authorities. That is the fundamental reason why we need separate agencies. We need an agency for adults. We then need accountability locally through local authorities for nought-to-19 education and provision up to 25 for people with learning difficulties.

Once we have made that decision, we need to be able to deal with the problem that FE colleges in particular would have, which is that without some sub-regional and regional arrangements that can be brokered if there are problems, they would have lots of conversations with lots of different local authorities. A precondition to accepting the institutional infrastructure that we have designed and which is reflected in the Bill is agreeing with raising the participation age. I know that in Committee on the Education and Skills Bill, the hon. Gentleman’s party voted against that. If he opposes RPA, it is perfectly credible for him to oppose this proposal. If he supports RPA, I cannot see how he would not see that local authorities should have responsibility for 16-to-19 commissioning and therefore that there is a need for an agency to be able to broker and facilitate the commissioning, alongside passing the funding from Government to local authorities, according to the decisions on commissioning that local authorities make.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland & The Deepings, Conservative)

The key issue is where we think most of the extra young people who stay on will be educated. My assumption—perhaps it is not the Minister’s—is that most of the extra people who stay on, who do not currently, will be educated in the FE sector. A very substantial number will, at least. Given that we think that the FE sector should be largely independent and self-regulated, with a slim, streamlined funding agency providing it with the funds to respond to need, it is not surprising that we do not support the establishment of the new agency.

Jim Knight (Minister of State (Schools and Learners), Department for Children, Schools and Families; South Dorset, Labour)

We discussed last year where the growth might be, but FE will be responsible for a significant part of that provision. A certain amount will take place in sixth forms, and, elsewhere in the Bill, we legislate to give sixth form colleges their own legal status, which they largely welcome. They will then have more of a relationship with the local authority, but other training providers will grow significantly, too. Apprenticeships will grow significantly, so the process will involve not simply FE colleges. The most important thing for the hon. Gentleman and others to understand is that we need seamless provision from 0 to 19 and to end the break at 16, Reinventing the Learning and Skills Council would, in institutional terms, keep the break at 16 and provide a substantial obstacle to increasing participation successfully—even if the hon. Gentleman disagrees with us about the enforcement of participation.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland & The Deepings, Conservative)

Following the logic of the Minister’s assertions, I must say that he is right that other, private training providers will absorb some of the growth, and right about apprenticeships, but neither they nor private further education training providers—those providing what FE colleges do—should come within the orbit of a young person’s learning agency. They would be better off under a skills funding agency. That seems reasonable and logical; and why LEAs have to be involved at all is beyond me.

Jim Knight (Minister of State (Schools and Learners), Department for Children, Schools and Families; South Dorset, Labour)

I know that the hon. Gentleman does not like local education authorities, even though his party is democratically responsible for most of them, but we should put Connexions and the information, advice and guidance duties on local authorities for 0 to 19-year-olds, and the commissioning responsibilities in the hands of local authorities, too. That is the progressive move that will make the process work, and it was a voice that we heard form the Local Government Association, the Association of Directors of Children’s Services and others, when we took evidence from witnesses.

It is also worth pointing out to the hon. Gentleman that participation in school sixth forms is rising faster than in FE colleges, so it would be difficult for us to design something that anticipated things as he sees them; we must design something with flexibility. There is no single body that will deliver to both young people and adults the intensity of support and advice that our future prosperity demands, and we should create that autonomous, non-departmental public body.

Amendment 256 would prevent the YPLA from funding providers directly and independently of local authorities when it is necessary to do so, as the hon. Member for Yeovil set out. For the overwhelming majority of young people, local authorities will commission places in the  way that we have discussed at length today—through the sub-regional groupings. Clauses 58 and 63 are intended to deal with a number of exceptions where the YPLA may have to play a different role. It is necessary to create those powers to enable the YPLA to pass funding to local authorities to support their own commissioning plans, and there is no doubt that they will be in charge of the vast majority of that commissioning. They will be in the driving seat, which I think was the phrase that the hon. Gentleman used, but they will need support from the YPLA to ensure consistency and value for money. The YPLA will fund the commissioning decisions of local authorities, and they will also have a subsidiary role in the YPLA to ensure coherence and budgetary control across the country.

The powers in clause 58(1)(a) and clause 58(3) are necessary in respect of examples that we will discuss later, where there is a need to commission from some providers—the Royal Ballet School, for example—that are genuinely national institutions that need a national funding arrangement rather than something that would make sense in terms of a single conversation with a local authority, because so few of the learners would come from that local authority area.

David Laws (Yeovil, Liberal Democrat)

Surely amendment 256, tabled in my name and that of my colleagues, does not in any way impede what the Minister is describing. All it does is to make clear what he has already made clear, which is that the local authority is the overwhelmingly dominant provider. But proposed clause 58(1)(b) makes it clear that other persons or agencies can be used to provide the education or training necessary, provided that it is in pursuance of arrangements made by local authorities in the discharge of those functions. There is no reason why local authorities should not be involved in that process, surely.

Jim Knight (Minister of State (Schools and Learners), Department for Children, Schools and Families; South Dorset, Labour)

Of course, local authorities will be involved. It is just that there are circumstances in which certain providers—the case has been made to us—have a relationship with so many local authorities and are not dependent on any individual local authority that having that single relationship does not necessarily make sense. The YPLA will also be required to undertake similar functions using these powers, where, under the intervention strategy agreed with the Secretary of State under clause 70, it has evidence that a local authority is failing or is likely to fail in its duties under clause 40 to commission suitable education or training. There may also be circumstances and instances where sub-regional groups of local authorities are not ready to take on their commissioning role and where the YPLA needs to act on their behalf. So there are three different sorts of circumstances where these powers may be needed.

David Laws (Yeovil, Liberal Democrat)

I am grateful to the Minister for being typically generous in giving way, but can he describe any circumstances in which the YPLA would want directly to commission against the wishes of the local authority? That is, after all, all we are calling for in amendment 256.

Jim Knight (Minister of State (Schools and Learners), Department for Children, Schools and Families; South Dorset, Labour)

In the case of intervention, where there is evidence that the local authority is failing or is likely to fail in its duties, there may be circumstances where a  local authority would disagree with the commissioning decisions that are in the best interests of learners. There might be issues in respect of those with particular needs, where there is a disagreement about what is reasonable or disproportionate expenditure. We explored some of those matters earlier in debate.

David Laws (Yeovil, Liberal Democrat)

Will the Minister give way?

Jim Knight (Minister of State (Schools and Learners), Department for Children, Schools and Families; South Dorset, Labour)

I will, but we need to make some progress.

David Laws (Yeovil, Liberal Democrat)

I am sorry to labour this point, but it is quite important. I am happy to leave aside the cases where a local authority clearly is not capable of carrying out its duties, because that is not what we are talking about. We are talking about circumstances where the YPLA might, even with a local authority operating perfectly properly, intervene to become the direct commissioner against the wishes of the local authority. I am not convinced yet that the Minister has explained why that would be necessary, unless the local authority was a failing authority.

Jim Knight (Minister of State (Schools and Learners), Department for Children, Schools and Families; South Dorset, Labour)

The hon. Gentleman has asked us to leave aside the very scenario where it would be necessary to use these powers. In the vast majority of cases the normal practice will be for the YPLA to fund the local authority’s commissioning decision. I want to be really clear about that. However, we want to hold these powers for the YPLA in those unusual circumstances where it is necessary for them to intervene. I can only see the YPLA acting against the wishes of the local authority if it was failing to deliver its duties under clause 40.

Amendment 122 would restrict the YPLA’s duty to provide funding in respect of 16 to 19 learners and learners with learning difficulties. The extension of the duty on local authorities to be responsible for specific learners over 19 reflects the Department’s recognition that some learners with learning difficulties who are subject to a section 139A assessment of their needs may require more time to complete their education, so would remain in lower-level provision for longer.

I understand that Committee members may be concerned that some specialist colleges, such as residential colleges, that serve learners from a number of local authority areas may need separately to contract with those local authorities. I reassure the Committee that that will not be so. The overriding principle is that each provider should have one commissioning dialogue for the provision being commissioned by local authorities and that dialogue will be with the lead local authority, decided by the sub-regional group.

Amendment 241 would go even further and remove the YPLA’s duty to provide financial resources to local authorities for any education and training provision that they secure under section 15ZA and would result in an even unfunded burden falling on local authorities.

Jim Knight (Minister of State (Schools and Learners), Department for Children, Schools and Families; South Dorset, Labour)

Before we were interrupted by the bell, I think I was about to say that I hoped that I had reassured hon. Members that none of their amendments to clause 58 was necessary, and I hope that they will not press them to a vote. Government amendments 308 to 311 are consequential to amendments made to part 2 about young offenders.

David Laws (Yeovil, Liberal Democrat)

I still think that the Minister’s explanation is rather odd and at variance with the early part of clause 58. He has described the circumstances in which the YPLA would fund provisions directly, which seem, in his view, to be only when the local authority is completely failing to discharge its responsibilities. The impression given by the first few lines of clause 58, particularly lines 5 to 12, is rather different. However, I accept what he said about the intentions in this part of the Bill, so we will save any further amendments to this section until we have had an opportunity to reflect on what he said.

Nick Gibb (Shadow Minister, Children, Schools and Families; Bognor Regis & Littlehampton, Conservative)

As my hon. Friend the Member for South Holland and The Deepings said when he moved amendment 240, these are probing amendments. Having listened to the Minister, I beg to ask leave to withdraw the amendment. Perhaps we can return to it later in the proceedings.