Amendment proposed [12 February]: No. 258, in

clause 22, page 8, line 41, leave out 'or'.—[Mr. Boswell.]

Question again proposed, That the amendment be made.

I remind the Committee that with this we are discussing the following amendments: No. 259, in

clause 22, page 8, line 42, at end insert

'or

(c) any other higher education funding body designated by the Secretary of State.'.

No. 245, in

clause 22, page 9, line 2, leave out from '(1)' to end of line 3.

No. 246, in

clause 22, page 9, line 3, at end insert

'but does not include a College of Further Education'.

I merely record the Opposition's hope that you, Mr. Gale, and all Committee members have had a splendid break, and say that, as we are keen to make progress this morning, I look forward to the Minister's response to the points made in our last sitting.

That was the debate on amendments Nos. 258, 259 and 245? The Committee will see that I had a splendid break.

Order. The debate is in fact on amendments Nos. 258, 259, 245 and 246.

Thank you, Mr. Gale. I add my sentiments to those expressed by the hon. Member for Westmorland and Lonsdale (Mr. Collins).

I shall deal first with amendments Nos. 258 and 259, which are well intentioned. They would introduce an additional provision in clause 22(2) to cover

''any other higher education funding body designated by the Secretary of State''.

That is unnecessary. There are only two funding bodies in England—the Teacher Training Agency and the Higher Education Funding Council—and although there is a funding body for Wales, it is covered by clause 25. The creation of a new funding body, for example through a merger, would require primary legislation, so the amendments are unnecessary.

On a technical matter, because there is no amendment to clause 22(1), which refers to the Further and Higher Education Act 1992 and the Education Act 1994, the amendments are irrelevant because only those two funding bodies are mentioned in those Acts.

In the last sitting before the break, we debated the potential for penalties to be levied through the research funding stream as well as the teaching funding stream. Will the Minister clarify the situation surrounding the Government's intention to provide research funding through regional development agencies? In theory at least, if universities receive such funding, the measures in the clause could be applied to that funding.

That simply goes back to the point that I made during the previous sitting. If the funding provided through regional development agencies is HEFCE funding—quality related money for research—it is subject to the conditions under the clause. If the funding comes from the research councils, it is not. There is a clear division. In fact, if we follow the proposals in the Lambert report, funding from RDAs is more likely to come from QR money than research council money.

The second pair of amendments relates to the phrase

''an institution of a class'' and would exclude further education colleges from the definition of a ''relevant institution''. The reason for including the phrase ''institution of a class'' is so that the Secretary of State, in the grant letter to HEFCE, does not have to list every individual university. We have published the proposed grant letter to be used in three years' time, which contains an example of an institution of a class because paragraph 3 refers to ''every relevant institution''. A relevant institution is a class. For example, Birkbeck would not be in that class because it is not a relevant institution—all of its courses are part-time. The Open university might be in the same position, but there may be complexities in that case. That is what we mean by a class of institution. An institution may belong to one class or another according to whether it has an access plan, because a different set of conditions will apply. It is simply a measure to avoid the Secretary of State having to list onerously every individual institution, and I hope that hon. Members will accept that there is nothing more to that. Every class would have to be defined by objective criteria so the phrasing is not as open-ended as hon. Members might have initially thought.

I counsel the Committee to reject the amendment on further education colleges, because it would completely deregulate fees. We are dealing with the power of the Secretary of State to apply conditions. If the Secretary of State cannot apply conditions in FE colleges, those undertaking higher education courses could charge whatever they like. The amendment would have that unintended consequence. However, I believe that it is a probing amendment, which allows me to clarify the situation in FE colleges. For those that have higher education courses franchised to them from a university, the onus for access plans and so on falls on the university not the FE college. For those FE college courses funded directly from HEFCE, which is a minority, the onus is on the FE college to ensure that their access plans are in place.

I am following the Minister's argument with care, interest and sympathy. I think that he is saying that, notwithstanding the fact that the institution may be a further education college governed by a further education corporation, if it has, or is in receipt of, public funds from a higher education funding council directly, HEFCE, as it would usually be—or the TTA in theory—could impose such a condition of grant. In other words, it does not confine itself only to institutions that are described as higher education institutions in the 1992 Act.

Given that 27 per cent. of those studying in further education colleges come from the 15 per cent. most disadvantaged wards in the country, there is hardly a problem with access and widening participation in FE colleges. However, the hon. Gentleman is right. Where the funding comes direct

from HEFCE, we cannot allow there to be a loophole whereby the college can charge whatever it likes and not be subject to the office for fair access. Where the college is franchised out from a higher education institution or university, which is the usual situation, the onus will be on the university.

In cases in which there is direct funding from HEFCE or another body, is it incumbent on a further education corporation that offers a degree of higher education activity to produce a full-blown access plan? If so, is that an onerous task or can it be scaled down for an FE corporation?

The college has to provide an access plan, but I do not imagine that that would be an onerous task. In almost all cases, it would simply state what it was doing already. The letter on the draft guidance from the Secretary of State to OFFA states quite explicitly that where there is a very good mix of social classes, OFFA's main aim is to ensure that if there is a £3,000 course, the extra £300 is provided so that the student support package is £3,000 rather than £2,700. That is the main issue. I do not think that it would be onerous to deal with other issues. I certainly have not heard many FE colleges suggesting that that would be the case, but the hon. Gentleman is right. If an FE college is funded directly by HEFCE, the onus is on the college to provide the plan.

May I take the Minister back to amendment No. 259? With regard to the comments that he has rightly made about the FE sector and its widening participation agenda, particularly in relation to the higher education qualifications or courses that it already delivers, has the Secretary of State already ruled out totally the principle that the Learning and Skills Council could directly fund foundation degrees in particular within the FE sector without having to go to a higher education institution to get its permission to deliver that in the sector? Would not the amendment preclude that as an option?

The answer is no and no. No, my right hon. Friend the Secretary of State has not ruled out the Learning and Skills Council. There is a concern. If we are rubbing out the lines at 16, and increasingly for the 14 to 19 age group under Tomlinson, and we are rubbing out the lines to a certain extent at 18, the confusion between LEAs, the LSC and HEFCE must be resolved. In dealing with amendment No. 259, I mentioned a merger. There could be a merger between the LSC and HEFCE to a degree, or the LSC may become another funding body. Either way, that would require fresh primary legislation, so the amendment is unnecessary. To produce the situation that I have described, we would need primary legislation.

For the avoidance of doubt, will the Minister confirm that he is talking hypothetically and that he is not saying that there are plans for a merger of funding organisations or that that is contemplated?

No, I am not saying that. The answer to the question about whether the Secretary of State has completely ruled out a merger is no, but that is not to say that there are active plans for a merger. Given the Tomlinson agenda and everything that is going on, it would be crazy to rule anything out when we are trying to make the system more coherent. We want there to be less bureaucracy for sixth form colleges and tertiary colleges, given that three funding bodies deal with the 14 to 19 age group. I am making that simple point.

The Minister is genuinely trying to assist the Committee and has clearly benefited from his break. Will he also deal with the point that I raised in my closing remarks about publicly funded students in private institutions, such as the university of Buckingham, or a private specialist college? Will such students or their institutions be affected by the clause?

I am glad that the hon. Gentleman raised that point, because although I cannot say that I spent the whole break thinking about that issue, I did give it some thought and went back to the drawing board. I am confident that there is no problem. There is only one private university, which is Buckingham, but many institutions have private courses.

The Government's policies will result in more.

The hon. Gentleman says from a sedentary position that there could be more, a point raised by the hon. Member for Daventry (Mr. Boswell). If there are designated courses at other private institutions, for which the state provides money, could a university set up a private institution to get round the legislation and allow unregulated fees? That is the problem raised by the hon. Gentleman.

The Minister has understood part of the problem. Equally, if a private institution in which students happened to receive support for their funding continued on that basis, and there was no malicious or clever intent to evade the legislation, would it be entrapped in the whole paraphernalia of access plans, notwithstanding the fact that it was a private institution and not receiving money directly from the funding council, but only indirectly for its students?

That is much simpler. The answer is no. I have always taken the line of not saying more than necessary, but having started on this theme, I will add that I am confident that if a university tried to set up a separate institution to get round the legislation, it would know that it would be left bereft of HEFCE funding, but would it be able to establish a fees-only situation that would be quite generous? It is almost incomprehensible that any university would try to do that, given that it would not only not receive HEFCE funding or research funding from HEFCE, but would probably get no student support, because designation is entirely a matter for the Secretary of State. If designation looked like being an issue, the Secretary of State could simply stop it by refusing to designate those courses.

Having answered a question that I was not asked, I hope that I have answered the questions that I was asked and that the hon. Member for Daventry will withdraw the amendment.

It is deeply flattering and entirely undeserved that the Committee has been poised for a whole week on my amendment, but there it is. I find myself in the position of the Spanish academic who was locked up by the inquisition for five years, returned to his duties at Salamanca university and began his inaugural lecture with the phrase ''As I was saying yesterday''. However, I need not repeat my point. The Minister has characteristically tried to respond to the points and has given us some very useful clarification.

The principle of amendment No. 259 is that it would add to the number of funding bodies that might impose such conditions. Although I was genuinely trying to help the Minister, if only by smoking out what was intended, I do not think that we need an extra body. As he said, if we did, we could legislate for it as part of the primary legislation. Therefore, applying—as mediaeval logic has now come back into fashion—the provisions of Occam's razor, that it is no longer necessary to multiply bodies beyond the need for them, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 22 ordered to stand part of the Bill.

I should have said at the start of the proceedings that the hon. Member for Epsom and Ewell indicated to me most courteously that he might have to leave the Committee at some point during the morning for reasons that I know we all understand. If he does so, he will take the Committee's good wishes with him to his wife.

We now come to clause 23. The Committee has got used to my unsubtle ways by now. As this is a complex issue and the amendments are inter-related, I shall allow a fairly wide-ranging debate on the understanding that there will almost certainly be no stand part debate. However, that is not carte blanche to have another Second Reading debate on the Bill. I expect remarks to be confined to the clause, if only because other important matters arise later in the Bill.