Schedule 4
1:45 pm
Nick Gibb (Shadow Minister, Children, Schools and Families; Bognor Regis and Littlehampton, Conservative)
Yes, of course. Clause 78 and schedule 4 establish the post of chief executive of these bodies. The explanatory notes refer to the Skills Funding Agency and the National Apprenticeship Service, but neither term appears in the legislation. From my reading of the Bill, all that appears is the term,
“Chief Executive of Skills Funding.”
I assume that there is some strange House reason why the other terms are not included in the Bill, and I would be grateful if the Minister could explain what it is. This is not only about nomenclature but the amorphous nature of the legislation, which gives weight to the worry that we are sowing the seeds of two very large new bureaucratic empires. The Association of Colleges has expressed that worry, stating:
“We are concerned that Further Education Colleges will have to respond to at least two funding bodies - their local authority and the SFA.”.
It wants to be sure that
“Colleges do not spend even more time dealing with bureaucratic burdens and can concentrate maximum effort to teaching students”
and feels that the process of abolishing the LSC and transferring its powers and functions to local authorities, the YPLA and the SFA should have been used as an opportunity to remove some of the duties and powers, not to reinforce them.
Amendment 106 would mean that the chief executive of the SFA could employ no more than 1,800 staff—the number that will be transferred from the LSC to the SFA, as confirmed by the Minister on Tuesday. The impact assessment states:
“As part of our thinking on the design of the new structures we are looking at opportunities for making administrative savings through centralisation of functions, including looking at the potential to share support services where possible, and greater use of new technology.”
It would assist the Committee if the Minister could expand on those matters and set out where he envisages cost savings being made, which support services are to be shared, and how new technology will help. We want to be reassured that the carefully crafted sentences in the impact assessment have behind them schedules and plans that will result in cost savings.
Before I talk about the cost implications for colleges, I have one further point to make on the cost of the plans to the Exchequer. As we heard on Tuesday, when we debated the transition costs of transferring staff from the LSC to the YPLA, the Under-Secretary of State for Innovation, Universities and Skills and the Minister for Schools and Learners explicitly stated in evidence sessions that the costs were set out in the impact assessment budget. The Minister has, in effect, already apologised for that. The impact assessment states:
“Although on-going costs of the new system will be revenue neutral there are likely to be transition costs relating to premises and pensions and, potentially, the transfer of the people from the LSC to their new employers. There will be assets that can be realised to offset these costs, such as the premises, though the current economic climate will make the calculations more complex. Work on calculating these is on-going and will proceed alongside the development of the designs for the Young People’s Funding Agency and Skills Funding Agency.”
Alas, that is all that it says about transition costs. The Minister is not in the room at the moment, but he must have had the impact assessment in front of him when he said that it sets out the transition costs in full. Moments before he explicitly stated that the transitional costs were set out in the impact assessment, he said that
“we expect to make administrative savings through a centralisation of functions, including shared support services, the greater use of technology”——[Official Report, Apprenticeships, Skills, Children and Learning Public Bill Committee, 10 March 2009; c. 180, Q428.]
Those words were lifted directly from page 32 of the impact assessment. It has been 48 hours since we asked him to provide estimates from the DCSF and DIUS of the transition costs. I hope and expect that they will be supplied when the Government respond so that we do not have to return to the issue on Report.
On the cost to colleges of the new arrangements, it is depressing to see the vision set out in the impact assessment. We used to have one organisation—the LSC—but now its functions will be carried out by three or more bodies, including local authorities, the YPLA and the SFA. The impact assessment states:
“Best practice guidance will be produced to cover partnership working.”
So one organisation is taken, split into three separate organisations and then a 20-page document is issued, to be read by all the senior figures in each of those new organisations, about how they should all work together. It says:
“In line with existing practice, providers of both 16-18 and post-19 education and training will continue to have separate commissioning conversations but, instead of these being with the LSC they will be with both the Skills Funding Agency and a local authority. This will not, therefore, be an additional burden on these providers, as in many cases they currently have multiple commissioning conversations with the Learning and Skills Council regarding these separate areas.”
It goes on to say:
“In designing the new system we are looking for opportunities to streamline arrangements — for example by using a single performance management framework for both pre- and post-19 providers”.
So there will be a “single performance management framework”. What a good idea! Maybe in time, once the new arrangements have settled down, we can merge the management structures and even create one overarching organisation that performs the functions of all three organisations in a streamlined way, benefiting from synergies and further efficiency savings. Until that moment comes, can the Minister expand a little more on what is meant by a “single performance management framework”, giving us a reassurance that that phrase is more than just a set of words drafted into a document for the impact assessment?
Amendment 106 would limit the number of staff that the SFA can employ to 1,800—the number that will transfer from the LSC. That should far exceed the number needed if costs are to be reduced. The SFA is not taking on any new functions, such as administering the academies, so the figure of 1,800 should leave it with maximum flexibility—apart from the flexibility to expand its empire and clock up ever-rising costs. I look forward to hearing the Minister’s response.