I want to probe the Minister a little further on the purpose of the clause. When we talk about diversity, there is sometimes a danger that we talk only about diversity of providers, when what the learner wants is diversity in the provision of courses. Few people particularly care who provides the courses; they want to know whether the type of course that they want to study is available locally and whether it is of high quality.
Is it not the case, however, that many young people need different environments for their learning post-16 and even before? Is it not the case that some need a pastoral sixth-form environment, whereas others will survive perfectly well and, indeed, flourish in the independent learning environment of a sixth-form college or further education college?
I take the hon. Lady’s point, but that is not what I was getting at. The point that I am trying to make is that much of what has been said about diversity relates to competition between private providers, who come in and provide one type of course, as opposed to colleges that provide a range of courses. However, I accept the hon. Lady’s point about a sixth form versus an FE college environment, which is valid.
Colleges have expressed concern that private providers will often undercut them on the cost of a particular course, because private providers do not do many of the more complex things that colleges do, such as providing for vulnerable young people or working with schools on their increased flexibility programme, for which all colleges complain that they are not fully funded. It is therefore quite easy for colleges as a whole to be undercut, and all that I am trying to establish is whether we will continue to safeguard the whole range of courses that young people may want to take, rather than focusing on different types of providers who provide the same course.
I very much echo the comments that have been made and, in a sense, I rise only to reinforce those that were made about clause 5. We are talking about a mixed economy, which will function best if people have the widest variety of institutions and vehicles, including workplace institutions, in which to carry out their studies and the widest range of modes of delivery to help them to do so, including distance learning, which we have not discussed but which is important.
There are some structural questions about the way in which the Government channel the money, and I have some slight reservations, although not in a contentious way, about train to gain. I agree with the Minister that we need to put the emphasis on business employment, which he discussed under the previous clause, and the train-to-gain mechanism, although it has not yet been fully tested, is at least interesting. However, what I would not like him to do—I do not think that he has done this yet—is to put all the funding into that mechanism and leave nothing for other activities.
As we have discussed, Ministers may need to reserve some money for national competencies and networks of vocational excellence. However, it is extremely important and in the spirit of clause 5, which we have just debated, that we consider the position of the individual learner. I still have considerable sympathy with the concept of individual learner accounts. We will not debate what went wrong last time—I am not sure whether any of us quite knows—but it is valuable to give people the opportunity to unlock their own potential and to make their own choices as stakeholders in the process. We should facilitate and celebrate that. The clause is facilitative and positive, and I therefore welcome it.
We need a market-driven system, because we live in a market economy and have competing providers. We also have competition in the choice available to individuals, whom we need to empower particularly in relation to the social return of their own learning. It may be that those at later levels can cope with the process and self-fund, but we need to keep all that in mind. The clause should help us to deliver that mixed economy or at least to debate whether it is taking place. It is important for us to encourage that, and when Ministers get something right, we should encourage them in doing so.
The debate has been short but instructive. I agree with the hon. Member for Brent, East that there should be diversity of not only provision of courses, but providers. We should certainly be seeking the highest possible quality, and we should acknowledge the improvement in quality in both further education colleges and independent providers in the past five to six years. In further education colleges, for example, the success rate has risen from 59 per cent. to 77 per cent., which is a very significant improvement in performance.
I also agree explicitly with my hon. Friend the Member for Sheffield, Hillsborough that in the provider structure we need a range of provision for the individual at a local level, whether that involves a school sixth form, a sixth-form college, a further education college or an independent provider. Often the judgment will be for the individual to make based on their particular circumstances.
I respect the track record and involvement in the issue of the hon. Member for Daventry. However, I am getting a little confused. In previous debates, I have heard strong demands from the Opposition Benches that we should implement what Leitch said about moving in a demand-led direction. Now we hear that not everything should lead in a demand-led direction and that we should hold back on some things. If there is a need for clarity from the Government, then I think that there is a need for clarity from the Opposition.
Perhaps I can assist the Minister by saying, as a matter of general principle—I have no executive responsibility for this, as he will have noticed—that my view is that we need to move towards a demand-led system. I merely suggest to the Minister, if only for his own protection, that he should moderate or modulate that approach by giving a proportion of assistance for self-funding and self-selection to supplement the system but in no sense to take it over.
I strongly agree with the hon. Member for Daventry about the importance of individual learning accounts. If he examines the commitments that we gave in the further education White Paper, he will see that we have made it clear that from September we will trial individual learning accounts at level 3. We all know the difficulties that we had with the original notion of individual learning accounts, but virtually everyone to whom I have spoken in the further education and training sector has acknowledged that that initiative, although there were flaws in its design structure, unleashed something in personal commitment to education and training that we should value and capture. That is why, in my view rightly, we are looking to trial those learner accounts from September.
On the specific arguments, the clause is about ensuring that there is a duty in relation to diversity and choice.
We spoke earlier about savings to the Learning and Skills Council. Does the Minister agree that the provision of diversity and choice could actually lead to an increase in costs for the LSC? Once choice is introduced into the system, it has the potential to cause major shifts in the nature of the market because of the introduction of learner choice into the marketplace. Has an impact assessment of the potential for the LSC to incur increased costs been carried out?
The hon. Gentleman is eliding the issue of expenditure on administration, which was his original point, with expenditure on the provision of the service to the young person or adult. In terms of a variety of providers being able to meet that demand, we stand by the Government’s track record of investing in the further education and training sector in a way that has not happened in the past.
In certain circumstances, there will be a need to open up the market to new entrants, which is only one of a range of options that can be used to tackle poor quality. The right intervention will depend on the circumstances, but under the right circumstances contestability in competition can act as a powerful lever to raise quality by increasing the rewards to good providers and the penalties for poor providers. However, as we said in the White Paper, it is important that there is not competition for its own sake. The LSC will review provision every five years in each area to establish whether competition is needed to improve quality, promote innovation or expand provision, and new and existing providers throughout the country will be able to bid.
To respond to the point made by the hon. Member for Brent, East, all providers will have to meet rigorous quality criteria, which will include the ability and commitment to collaborate with other providers when appropriate and to deliver curriculum choice in 14-to-19 learning.
I want to make it clear that further education colleges have nothing to fear from that competition and the expansion of the demand-led approach. Before we launched the train-to-gain initiative, further education colleges were nervous about how successful they would be under it. In fact, they have been very successful in gaining the business, which demonstrates their quality and their success. I urge the Committee to agree that the clause stand part.