I was talking about a combination of the LSC’s strand 7 and—[ Interruption . ] That is not a surprise; it is what I said about five minutes ago. I am talking about a combination of the strand 7 measures and the changes that will result from the Bill. I can update the Committee: through the strand 7 “Agenda for Change”, we now estimate that 1,100 net posts will be removed. Combined with the measures that we are debating, such as the move from 750 to 150 non-executive directors, that will create an overall annual saving of £40 million.
I know that we will return to this issue. We are looking for precision and clarity. I welcome the acknowledgment from the hon. Member for Daventry that what he and other Opposition Members said on Second Reading was without foundation. The claim was that the LSC’s administrative expenditure was£1.8 billion, and one can reach such a figure only by including learner support and capital expenditure, for example.
One of the things that I am very proud that this Government have done in the past 10 years is significantly to expand our capital expenditure. In 1997, not one penny was being spent in the mainstream capital budget; today, £500 million per annum is being spent. If that is administrative expenditure, frankly it is the type of administrative expenditure that people on the ground have been crying out for over an awfully long period.
The hon. Member for Daventry also asked whether the transfer of responsibility from local to regional LSCs will make it harder for SMEs to be involved in skills planning and delivery. I genuinely do not believe that that will be the case. Employers will make up more than 40 per cent. of the membership of the LSC’s national and regional councils, while at the local level, as I said earlier, the LSC’s 150 or so local partnership teams will work with a much wider range of stakeholders, including employers, to ensure that local learning and skills needs are properly identified.
I want to discuss the specific details of the amendment. It may be helpful for the Committee to recall that the Learning and Skills Council is the Learning and Skills Council for England. In that sense, it is a single, unitary body and I believe that that is one of its key strengths, enabling it to work at national, regional, local and sectoral levels. As we set out in the 2006 White Paper, we are strengthening both regional and local tiers of the LSC. The LSC has to be sufficiently flexible to work across regions, sectors, city regions, areas and cities, and also to engage with partners, employers and learners at every level.
The amendment that the hon. Member for South Holland and The Deepings has tabled seeks to remove the provision mirroring section 20(2) of the Learning and Skills Act 2000, which applies to existing local LSCs. That provision reconfirms, for the absolute avoidance of doubt, that the LSC has flexibility to secure commissioning and delivery of learning and skills in the most effective way possible.
So, for example, a regional council will be able to contract with and fund a learning provider operating anywhere in England, or indeed fund an institution that attracts students from outside its own specific area. A practical example of where that would be necessary would be in the event of a merger of two colleges in neighbouring regions. The legal entity would be in one region, but the LSC regional council for the neighbouring region would need to engage with that provider. That is notwithstanding the fact that the provider’s legal base would be in the area covered by a different regional council, possibly securing provision across regional boundaries. I think that that was the issue that the hon. Member for Daventry was driving at.
The amendment tabled by the Opposition would explicitly prevent that type of activity, as well as removing the ability of a regional council, where specified by the council, to undertake activity on behalf of the council for the whole of England. Although we intend that the regional councils will be underpinned by statute, I believe that the sub-regional structure needs to be flexible and responsive. The LSC will improve engagement through the 150 or so local partnership teams that I have already referred to, and there will be about one team per local authority area. I believe that those partnership teams will be much closer to local communities than the current 47 local councils, and therefore they will be better placed to ensure that the needs of learners are being identified and met.
Those local area partnerships, as flexible internal executive arrangements, are not specifically provided for in the Bill, but their job is to work directly with local stakeholders, including employers, local authorities and local colleges, schools and independent providers, to identify and meet the learning and skills needs of each area.
The LSC will have to consult learners and potential learners, as well as employers. It will also—rightly, in my view—work with the national learner panel and other learner networks to ensure that the voice of learners is genuinely heard. That is a very important issue and therefore we intend that the LSC will recruit and appoint a learner to the national council in due course, possibly this autumn. We also expect each LSC regional committee to include a learner as well. That is an important change and, allied with the other responses that I have given, I hope that the exchanges on this particular amendment have introduced some clarity, and I am grateful for having had the opportunity to contribute to that process.
The need for the regional councils to exercise functions that are delegated to them by the national council, both within and outside their area, is clear. These are sensible provisions that will enable the LSC to continue to operate flexibly and effectively. I therefore ask the hon. Gentleman to withdraw the amendment.