I beg to move Amendment No. 21, in page 11, line 33, leave out Clause 17.

With this it will be convenient to discuss the following amendments:

No. 25, page 12, leave out lines 39 to 45.

No. 22, page 14, line 12, leave out Clause 18.

Clauses 17 and 18 transfer and extend the power to intervene in FE colleges. Clause 17 transfers such power to the Learning and Skills Council, and clause 18 transfers it to Welsh Ministers. I have said today and previously that I celebrate the work of FE colleges, and it is not just me who takes this view. FE colleges do particularly well in Ofsted inspections: Ofsted deems 90 per cent. of such colleges to be satisfactory or better. Students report high levels of satisfaction—67 per cent. are either "very" or "extremely" satisfied with their experience of college life. We take pride in what those colleges have achieved in the years since they were incorporated.

The Bill is a missed opportunity, however, to advance the agenda recommended by Sir Andrew Foster in his report. He argued that there should be less centralisation and a move towards greater self-regulation. Clauses 17 and 18 move in the opposite direction, however, to that recommended by Sir Andrew, whom the Government commissioned to consider these matters. We are disappointed that they feel that must extend the LSC's power to interfere in the life of colleges. Such micro-management is unhelpful and further diminishes the morale of those missioned to run and manage our colleges.

Underperformance in the sector is rare, by Ofsted's and the Minister's own admission. Indeed, I challenged him on this point in Committee, and he agreed that FE colleges are doing a good job, for the most part. There is no evidence of growing problems, and no evidence that Ministers have had to use their existing powers to intervene in respect of college principals to deal with underperformance. Indeed, and as the Minister knows, when I asked him how often the Government had used those existing powers since they emerged in statute to sack college principals, he revealed that not once have they ever been used. The Government have never had to use them to interfere in the lives of colleges as a result of underperformance, yet they are seeking to extend them and to transfer them to the LSC. As I said, performance is deemed to be satisfactory or better in the overwhelming Majority of colleges. Where it is not, we have been offered no evidence to suggest that that is due to inadequate leadership, or that the powers that the Government are seeking to create would be likely to solve the problem.

We have reached the point where a sensible Minister—one who has listened and made concessions in respect of concerns expressed by Opposition politicians and third parties—is, frankly, dancing on the head of a pin. The powers are now so qualified as a result of his listening and responding that they are barely worth introducing at all. Ministers already have powers and if they choose to use them, they can do so. There is no need for the detailed powers proposed. Of course, there must be accountability where public money is spent, and of course a long-stop power is needed, because the public interest is involved and we all want to ensure both rigour in respect of standards and probity in our colleges. The Minister is right to say that the standards are in learners' interests but, given that the existing powers have not been used, the concerns expressed in colleges about their extension and the lack of evidence that they would improve standards, I really do not understand why he insists on maintaining that part of the Bill and why he will not give way and accept the amendments.

There is a particular issue about the powers being vested in the LSC. All the evidence is that there is too much regulation and too much micro-management in the lives of colleges. This is yet another statutory power over colleges, which sends out an important signal about how the Government see the future. We see the future in the shape of self-regulation, but the Government clearly do not, despite the fact that the Minister tells me he has a working party looking at just that subject. A working party is looking at how colleges can self-regulate, yet the Bill says they need to be regulated by a third party—they need a third party to decide not only whether their principal is up to the mark but whether their governors, senior managers and members of staff are up to the mark. Surely, in a mature organisation that is being well managed and led, those judgments are best made by people close to the action on the front line who understand the circumstances of their colleges and the needs of learners—the community of interests. I really do not see why the LSC, which when all is said and done is a quango, not a democratically elected body, and certainly not vested in the local community, should take those powers.

I have one or two further questions—as if my previous words were not enough to damn the clause. First, the regulatory impact assessment states that there will be an additional burden on the LSC in terms of administering the new Intervention strategy. The Minister is a diligent man and will have the figures to hand, so will he estimate the cost of that additional burden and tell us whether new staff will be involved to implement the strategy, whether existing staff will handle it, and how often he anticipates using it? He will have modelled those figures because that is the sort of man he is; he is a Minister who has done his work so he will have the answers for the House. What impact will the strategy have on existing staff, how much time will it take and what will it cost?

Moreover, the Minister must have a notional view of how many colleges are in such a state that he expects the powers to be implemented. Does he expect the powers to be used regularly? What kind of colleges does he expect will be subject to the powers? He will have the details to hand—the number, and probably the names and addresses, of the colleges he expects to be first in the firing line of the new, draconian powers.

Furthermore, what are the proposed savings in the Department for Education and Skills—although I should have called the Department by its new name—of transferring the intervention strategy to the LSC? There must be a concomitant saving and I am sure the Minister has those figures at his fingertips, too. How can we judge the effectiveness of powers that have never been used? Why do powers that have never been used need to be extended to college managers? I ask that question specifically because the provisions apply not just to principals but to other managers in colleges, too.

Finally and definitively, once again I ask the Minister, as I have both privately and publicly, whether he expects the powers to be used more often once they have been transferred to the LSC. If he does not—he shakes his head—and as the existing powers have never been used, why should we waste any more time debating the clause? It should simply be struck out of the Bill. I commend the Amendment to the House.

We debated Clause 17 extensively in Committee, and subsequently I held some helpful meetings with the Minister's officials, for which I am grateful as they clarified some of my concerns. Nevertheless, I continue to be concerned about the clause, which is why I added my name to the Amendment tabled by the Conservatives and why I tabled amendment No. 25.

My objections in Committee, which continue, are, first, that I do not understand the point of the clause, particularly as the Secretary of State has never used the existing powers. Secondly, I am extremely uncomfortable about transferring such directive powers to an organisation that is in no way democratically accountable. Thirdly, although I appreciate the changes the Government have made to the clause and that it will not apply to teaching staff but only to staff at the most senior level of an organisation, I am extremely uncomfortable about giving the LSC powers to begin dismissal proceedings. I am not sure that that is anything more than sleight of hand in terms of the powers the Government proposed originally.

I now have a new objection to the clause, to which I referred earlier. We touched on the point in Committee when I reminded the Minister that for many colleges the LSC is not the sole funding partner at present. At some point in the future when the Government initiate the changes—presumably in two or three years' time—the LSC will no longer be a funding partner at all for many colleges. I remain disappointed that the Government are not willing to state on the record that they intend to change the clause when they bring in the changes to 16-to-19 funding. I understand the Minister's point; he wants to consult and he does not want to be hemmed into a corner. He will obviously need to consult on the detail of the proposal, but it seems blatantly illogical for him to continue to argue that the Government might ever want to retain the clause if they intend to transfer funding powers to local authorities. For that reason, I remain concerned about the clause, and hope that the Minister will give me some reassurance about a point that I have already raised several times today.

Two of the best colleges in the country are in my Constituency, so it is difficult to talk about what happens when colleges go wrong because I do not have much experience of that. The colleges constantly achieve grade 1 in their inspections; they both have beacon status and perform excellently. They do a wonderful job.

None the less, the Government or someone—the local authority, the LSC or even an institution with more direct Government links—must have some Intervention powers. I know of other colleges that have been allowed to run their own show for a long time without much regulation at all. They have performed badly, their staff are demoralised, they have sold off land and property willy-nilly and not behaved well. There must be some degree of intervention to make sure that colleges measure up and do the right thing.

The most valuable thing is cross-pollination between good and poor colleges. In colleges such as the sixth-form college of which I have been a governor for the past 14 years there is an immense amount of skill, wisdom and understanding of how to run a good college, which should be spread to other colleges. The Government ought to facilitate as much of that learning—cross-pollination from good colleges to weaker ones—as can possibly be managed, because there are good ways to do things and there are poor ways to do things.

Of course, some colleges have inherent disadvantages, and they should not be treated unfairly. Just because a college has perhaps not performed well in terms of academic results, its principal should not simply be sacked or whatever. Sometimes a college has a pool of students who are more difficult than others. If the college, especially if it is an FE college, is in a deprived area, with very alienated students, problems can arise that are not directly the principal's fault.

Cambridge sixth-form college has every advantage. It is surrounded by highly academic, intelligent, qualified people, whose children are naturally very positive about education and do extremely well. One must be understanding about each college's pool of students, but some ability to intervene must be retained. The inspection process must go on, and we must facilitate as much as possible the cross-pollination from good colleges to weaker ones to ensure that they can learn best practice.

I, too, want to speak briefly in support of the amendments tabled by my hon. Friend Mr. Hayes. There are four reasons why they are sensible. First, Clause 17 is in many ways oddly placed in the Bill. Elsewhere in the Bill,, the Government are quite properly attempting to give more freedoms to FE institutions. In many cases, they are giving them the freedom to award foundation degrees, and in other places they are giving FE colleges more authority over what they do. Yet we now see a further restriction of that authority and further Intervention by the LSC in the day-to-day management of the colleges. Of course, I entirely agree that it is not right that there should be no possibility to intervene when colleges are clearly going wrong, but that is a wholly different thing from the micro-management of the institution and the ability of the LSC to intervene in the way that is proposed.

The second reason, to which my hon. Friend the Member for South Holland and The Deepings also referred, is that I remain unconvinced that the Government have worked out what all these changes will cost, not only for the reasons that he has given but because there could be legal costs if the LSC is responsible for deciding to remove members of the governing body. Again, we discussed that in Committee, but we still do not have a clear sense of what the Government believe these changes might cost the learning and skills councils. All that we know heretofore is that the Government expect an additional cost to fall on the LSC, but no one knows what that additional cost might be. That seems profoundly unsatisfactory.

The third reason why these amendments are right is that what the Government are doing in the clause is setting up the LSC to do something different from what they and, indeed, we in the Opposition would like the LSC to do. We all want the LSC to be very much learner-focused and to encourage learners to find their own way through further education and to do the courses and acquire the skills that are most suited to them. Surely we do not want the LSC to become bogged down in the kind of management decisions in FE colleges that the clause gives it the opportunity and, indeed, encourages it, to do. The clause will create an LSC that none of us wants, doing things that none of us wants it to do.

The fourth reason has become apparent only during the later stages of the proceedings on the Bill and as a result of the machinery of government changes that the Government have talked about in the past few days. As there is now undoubtedly a question mark over the future of the LSC in general, it seems crazy to start to discuss changes that will give it more power, more authority and more responsibility in specific areas, when we do not yet know what form the LSC, or any successor body, will have in the future. For all those reasons, my hon. Friend's amendments are entirely right and deserve the support of the House.

I welcome the constructive debates that we have had on clauses 17 and 18, but I am somewhat disappointed that we appear not yet to have reached a consensus, especially as the organisation that rightly represents and lobbies on behalf of colleges—the Association of Colleges—clearly believes we have achieved the right approach to eliminate poor provision on behalf of learners and employers. I strongly believe that Clause 17 is an essential component of our reforms of the FE system in England. It is vital if we are to be able to deliver our promises to eliminate inadequate provision by 2008. Similarly, clause 18 is fundamental to enable Welsh Ministers to achieve their aims.

We have acknowledged that in England there is less underperforming and/or failing provision in the system than we have had previously, and I am personally committed to accelerating that trend. We have made real progress. Nevertheless, where there is real and fundamental failure, it is right that we retain these powers of Intervention.

There has been considerable debate about the accountability of the LSCs and the autonomy of governing bodies. I agree that they are important matters of principle, but I make no apology for putting the interest of learners first. As hon. Members eloquently said in Committee, further education can transform an individual's life chances. That is why we are determined to do everything necessary to ensure that poor, failing and underperforming provision is effectively tackled, and why there needs to be a clear and robust process for identifying and managing underperformance and failure in the FE system.

Nevertheless, I have listened very carefully to all the points made on these issues, and the Government amendments that I tabled in Committee address the issues concerning greater transparency, parliamentary accountability and the autonomy of governing bodies. I am disappointed that there remains Opposition in the House to our proposals for intervention in failing colleges, particularly as I have indicated that the Association of Colleges and Fforwm in Wales are satisfied that we have addressed their concerns in the revised iterations of clauses 17 and 18 respectively.

The AOC has also said that it considers that this approach is consistent with our plans to move towards a more self-regulatory system. It believes that it will help to drive a culture of responsibility and a pursuit of high standards and raising performance across the system.

I have taken the opportunity to put on the record the fact that the hon. Gentleman has been a listening Minister. He has taken representations from the Opposition and others, and the Bill has been affected by that. He is right to say that he has listened to our representations on this and other clauses, but the AOC, like us, is dealing with a moving target. He has changed Departments; the Government have changed the structure of Government; the 14-to-19 curriculum is all over the place; and the response to the Leitch review is still awaited. The AOC is responding to a changing situation, and to quote it without taking account of those changes is a little unfair, frankly. I think the Minister knows that the Clause does not stand up, and even at this late stage he should agree to the Amendment and withdraw the comments that he has just made.

I have not discussed these proposals with the AOC since the machinery of government changes. However, I have worked long enough and hard enough with the AOC to know that, in the two weeks since these announcements were made, if it had a fundamental problem, it would have beaten a path to my door to ensure that I was aware of that message, and it has not done so. I am confident that we have responded; we have listened; we have moved; and we have addressed the concerns that Opposition Members and colleges have put forward.

This is about getting the balance right. These powers of Intervention will be very rarely used. We want governing bodies to take responsibility for their own circumstances and to deal with underperformance of their own volition, but it must be right that, in extremis, when all else has failed, as my hon. Friend Kelvin Hopkins said, there should remain a power of intervention. There have been a number of instances over the years, particularly during the 1990s, when there have been real cases of failure in the system. I am sure that, if that occurred in Opposition Members' constituencies and they were told that the LSC, the Government or anyone else had no power of intervention, they would be the first to complain.

I think that I might be helpful. I have today received a briefing from the AOC saying that the Clause addressed its original concern, which was specifically related to the rights and responsibilities of colleges and governing bodies and the possible conflict with existing employment law. It is satisfied with the clause, and I want to reassure my hon. Friend the Minister.

I thank my hon. Friend. I am having to get used to the fact that he is intervening to help me, which has not always been the case—he knows that I make that comment with the best regard. He is absolutely right: the AOC has been satisfied. I turn now to some of the specific points that have been made. In terms of the additional burden, the LSC will deal with it from existing resources. We are not talking about major additional expenditure. Indeed, the proportions may well come down.

May I take the Minister back to the issue of Intervention powers? He is right to say that we all wish there to be intervention powers available in extreme situations, but surely some of those powers already exist and are held by the Secretary of State. We on this side of the House do not understand why it is necessary to transfer the powers to the LSC, given that, as he said, they are so rarely used.

It is right that those powers reside in a body that is close to the interface with colleges and that is aware of all the detailed circumstances that relate to a particular provider. There is still an accountability framework for the Secretary of State to oversee the provisions, which will assure accountability to the House for the actions that the LSC takes. It is right that, in extremis, those powers exist. As I said, there is not a concern in terms of an additional burden. Neither is there a contradiction between having the powers in extremis and at the same time strongly advocating a move towards a system of greater self-regulation on the part of FE colleges.

That is dancing on the head of a pin—and it is not even elegant. It is not even a foxtrot; it is some vile, contorted dance. The Minister is telling us that it is consistent with self-regulation to have additional regulation from someone else. He is giving extra powers to the LSC at the same time as saying that he wants to move towards colleges regulating themselves. He says that the powers are necessary, but powers already exist in statute for the Secretary of State to intervene, in extremis, to ensure quality and probity, and they have never been used. Even now, will the Minister give way on this matter and accept the amendments? That would be in the spirit that has pervaded during the course of the considerations. I am disappointed in him. Let us stop this rather hideous dance.

I can lay claim to many skills, but dancing is not among them. What I said about wanting greater self-regulation is not at all inconsistent. I urge the hon. Gentleman to talk to the self-regulation group, which is made up of FE college providers who are enthusiastic and committed to the process. At the same time, those providers recognise that, in extremis, when all else fails, there has to be a back-stop power of Intervention. That is what the provisions are about. We have listened, responded and moved significantly, but we have to retain the powers. In that context, I ask the hon. Gentleman to withdraw the Amendment.

As I have said, the Minister is a responsible man. He has listened to the measured case that has been put by the Opposition, who have adopted a constructive approach throughout the consideration of the Bill. That is what good opposition is all about. However, frankly, the response to this debate has not been worthy of the Minister or others on the Treasury Bench. The opinion of the House needs to be tested on this matter. Colleges do a good job. They are deemed to do so by their students and by Ofsted. The powers that the Secretary of State has to intervene to deal with failure on the part of principals, governors and others have never been used, but, despite that, those powers are being extended and vested in the LSC.

Finally, the Minister tells us that that is consistent with a move to self-regulation. We trust college governors, principals and managers to mind their affairs properly. It is clear from what we have heard today that the Minister is not prepared to invest the same level of trust in them. We believe in our FE colleges. We do not believe that they are likely to fail and if they do, we think that they will sort those matters out properly themselves. Of course there need to be long-line powers, but they exist. This aspect of the Bill is unnecessary. I am convinced that the Clause should be removed from the Bill and I therefore urge the House to support the Opposition Amendment—I am delighted to say that Sarah Teather has supported it eloquently—which would improve the Bill.

Question put, That the amendment be made:—

The House divided: Ayes 132, Noes 255.

Question accordingly negatived.