Report on inspection bodies etc.
‘(1) The Secretary of State shall lay before Parliament an independent report to Parliament on the operational efficiency and effectiveness of organisations responsible for the monitoring and inspection of further education institutions.
(2) The Secretary of State shall by order define those organisations subject to such a report.
(3) A report under subsection (1) above shall be published annually for the first five years after this section comes into force.’.—[Mr. Hayes.]
I beg to move, That the clause be read a Second time.
We have spoken today about bodies that have relationships with FE colleges in all kinds of ways—inspecting, funding, monitoring, planning, setting standards and helping them to improve. They were highlighted by Sir Andrew Foster, whose report into these matters revealed that there were no fewer than 17 such bodies. Since his report, one has gone and another has been added, so there are still 17. He described that as “a galaxy” of oversight, inspection and accreditation, and argued that they needed to be rationalised, co-ordinated and focused. He went on to say that the inspection regime of FE colleges could be lightened by rationalising the process and moving to a system under which colleges regulated themselves to a much greater extent. He argued for deregulation—self-regulation, I should say—by degree.
“lay before Parliament an independent report to Parliament on the operational efficiency and effectiveness of organisations responsible for the monitoring and inspection of Further Education institutions.”
It further proposes that the Secretary of State should define those organisations and that
“a report shall be published annually for the first five years after this section comes into force.”
We are anxious to put some independent, empirical information before the House on the size of the galaxy that Sir Andrew Foster has identified. We want to know how many satellites there are in the galaxy and the day-to-day effect that they will have on FE, so that we can move to the lighter-touch regulation—self-regulation—that Andrew Foster recommended and which we support.
We believe that colleges can do more. We think that there is untapped capacity in FE. We celebrate the skills of leadership and teaching in that sector. We suspect—more than that: we are confident—that they feel inhibited from exercising their skills; they feel restricted by bureaucracy and burdened by over-regulation.
For the benefit of the Committee, I shall say more about Andrew Foster’s report. He said:
“Currently, the rigours of proving the quality of provision to the plethora of interested bodies, including qualification bodies, are in danger of detracting from the need for continuous improvement and the ownership of that by FE colleges...The world of FE college oversight is crowded. There is a galaxy of oversight, inspection and accreditation bodies.”
As I said, he argued that they needed to be “rationalised, co-ordinated and focused.”
Would the hon. Gentleman help the Committee by giving examples of the sort of bodies and organisations to which he refers?
I would be delighted to do so, but I did not want to tire the Committee unduly. I have a list; it is in the report. It comes immediately after the reference to the “galaxy of oversight”. When speaking of a galaxy, Sir Andrew Foster mentions awarding bodies, the Qualifications and Curriculum Authority, the Institute for Learning, Lifelong Learning UK, the Centre for Excellence in Leadership, the Learning and Skills Development Agency and the Quality Improvement Agency, local learning and skills councils, the standards unit of the DFES, sector skills councils, regional development agencies, local authorities, Jobcentre Plus, the Higher Education Funding Council for England, the Learning and Skills Council, the Quality Assurance Agency, the Adult Learning Inspectorate, which disappeared soon after being criticised by the Government, and Ofsted.
All those bodies are, of themselves, significant. They all do good work. Some are essential to the relationship between Government and further education, and some are vital to improving standards. The problem is the immense overlap between them. Not only is there duplication, but the feeling among FE colleges—the hon. Lady, with her immense experience in these matters must have encountered it as much as I have—is that they are forced endlessly to jump through hoops, sometimes the same hoops by different people, and sometimes for an uncertain purpose.
How often have members of the Committee met FE college principals and senior managers who say that they spend a great deal of their time collecting or collating data, but are not sure why? I suspect that any commercial organisation—and I have no dogmatic reverence for the commercial sector—looking at the matter would want to rationalise the process in the way that Andrew Foster recommended. That is not my analysis; it is his. It is not my report; it is the report that resulted from the Government asking an independent person to consider those matters. The hon. Lady is a perfectly reasonable member of the Committee and of this House, but we might, through this new clause, ask for a report back to Parliament on what the impact of all of this is on the daily life of colleges.
The general point about making an efficient regulation system is a good one. What I was not clear about was what specifically the hon. Gentleman would suggest should be taken out of the current system of regulation, and which of those bodies that he identified should be taken out of the FE sector.
The Government took the view that the adult learning inspectorate should go. That was just after the adult learning inspectorate was damning about the Government. In its final report, the inspectorate was critical of the Government’s record on skills. I do not want to be too prescriptive about that. Far be it for me to describe in detail precisely which of the requirements on colleges is most burdensome. However, if we move to self-regulation, that means by definition reducing some of the burden of regulation on others. If we are going to let FE grow up, we must be adult about that process.
I shall make this point, which will save me from making a speech, and help to speed up the Committee. I have great sympathy with the point that the hon. Gentleman is making. In response to the point made by the hon. Member for City of Durham, given that the report was commissioned by the Government, is it not for the Government to respond to the recommendations of Sir Andrew Foster’s report? I do not see any need to put the matter on the face of the Bill, but the hon. Gentleman makes a good point. I would like to see the Minister make regular statements to the House about progress on the rationalisation of those bodies.
I fear that the relationship between the official Opposition and the Liberals is becoming too close. I am becoming worried that every time the hon. Lady rises, I agree with her. There is a moving together of the Opposition parties, at least on the subject of further education. However, that might not feature during the course of the Bill, so I will not offer a hostage to fortune. She is right, of course; it is not up to me to list which bodies would go and what form the new regime would take after regulation, as the hon. Member for City of Durham knows.
However, what is absolutely clear is that since Foster, the burden of regulation has not altered significantly. We still have a large number of bodies, and regular reports of duplication and repetition from colleges. We do not have a blueprint for self-regulation of the kind that I want to see. I am disappointed that the Bill does not do more in that regard. That is one of the reasons that I was initially so hostile to the part of the Bill that we have just debated. I accept that the Minister has mitigated, to a considerable degree, that part of the Bill, but it is a bit rich, in a world that gives FE colleges more responsibility, to have a Bill which at least in one important respect gives more power to those who have oversight of them.
Does my hon. Friend agree that any conclusions about the future and functions of the institutions he listed should arise from the results of the report and that the conclusions should come at the end of the report rather than at the beginning?
Precisely. And it is for the House and Members to consider what I described as independent and empirical evidence. We are asking in the new clause for a proper analysis of this. We do not claim that we have all the answers but we know the direction in which we wish to travel. My hon. Friend is quite right. Once we have that report there should be a debate about how we move forward on its results. I am more confident about the capacity of FE than some others may be. I have more belief in the leaders and teachers in FE.
The hon. Gentleman has made some sweeping statements about how he wants to remove bureaucracy, but rather dishonestly from my point of view, he has refused to say exactly what that would entail. I have just received, regrettably, a copy of the submission to the shadow Cabinet from the Conservative economic competitiveness policy group, “Skills Training for a More Competitive Economy”. It makes no mention of any of the changes that he suggests need to be made, but states:
“the flow of funds should be from the DfES to the trainee’s local authority, and from the local authority, on behalf of an individual trainee, to a training provider”.
Perhaps the hon. Gentleman would like to explain how the system he suggests would work in a way that reduces bureaucracy on further education colleges.
It would be quite wrong for me to speak on behalf of my right hon. Friend the Member for Wokingham (Mr. Redwood) about the report that he published. Indeed, its relevance to the clause is pretty thin, given that it is not about FE college management or FE college regulation. What I can say with confidence about that report is that it is absolutely right in wanting to slim down the funding and management process in FE. It is absolutely right in its analysis of the paucity of the Government’s policy in respect of driving up skills.
The Under-Secretary, who is a diligent Minister and a good Member of this House, must regard the figures for apprenticeship enrolments—his own Government’s figures—with a certain degree of shame. Now that he has read that first report, perhaps he will take the trouble to read the report that I published today on that subject. It shows not only that the number of people who are not in education, employment or training has grown by 15 per cent. since the Government came to office—
The Under-Secretary was tempting me down the road of exchanging claims about the Government’s record on skills. You are right, Mr. Atkinson. If we are to deal with the problem of NEETs, those young people whose lives have been blighted and whose dreams have been shattered, we need an FE system that is fit for purpose. That means an FE system that is confident, forward looking and highly focused. That would be best served in an atmosphere of self-regulation where the bureaucracy that surrounds FE was reduced. That is not my consideration. That is the consideration of most of the college principals I speak to and certainly it is the thrust of Sir Andrew Foster’s report.
To that end, our new clause 7 suggests that we look at those matters closely and that that examination be reported back to this House so that Members can make a judgment on how we move forward in that endeavour. I think that that is uncontentious and in line with Sir Andrew Foster’s considerations and, indeed, with the stated opinions of Ministers, who have said that they want greater self-regulation in colleges. I find it hard to believe that the Minister does not want that kind of empirical analysis, and impossible to conceive that he does not want that information reported back to the House. I look forward eagerly to him embracing the new clause as a helpful and positive addition tothe Bill.
I might have to disappoint the hon. Member for South Holland and The Deepings. He started by making an incorrect assertion; he said that Sir Andrew Foster’s very good report talked about 17 inspection and oversight bodies, and that one has been added and one taken away. That simply is not true. Two have been taken away. To claim that there has been no substantive change is completely at odds with the reality given that we have merged two inspection bodies, which have a major impact on FE colleges, to reduce their number from two to one.
I thought that there was a very interesting interchange, involving my hon. Friend, the Under-Secretary, about the report produced by the right hon. Member for Wokingham. I will take your counsel, Mr. Atkinson—all I would say is that, in the last two years, I have not met one FE college principal who has urged me to give funding responsibilities back to local authorities. If the hon. Gentleman believes that there is support for such a proposition, perhaps he can bring it forward.
Returning to the matters before us, I agree very much that the operational efficiency and effectiveness of all organisations involved in FE and training is vital. As we said, in our further education White Paper, we are committed to looking at the scope for further simplification, and all elements of the learning and skills landscape are kept under review. We are committed to continuing to seek further efficiencies.
The hon. Gentleman referred to Sir Andrew Foster’s report, which drew attention to the number of bodies. As I said earlier, we have since merged Ofsted and ALI so that now only one body inspects FE institutions, rather than two. We have also removed the Learning and Skills Development Agency. Also, as Foster suggested, roles have been clarified, as we described in last year’s “Further Education” White Paper, which was the right response to Sir Andrew Foster’s report. The remaining bodies have clear and distinct roles and responsibilities, and although we expect partners to work together, I do not believe that their activities overlap.
The hon. Gentleman has failed to recognise how the landscape continues to change as part of our ongoing reform agenda. The 17 bodies that Foster discussed are organisations with monitoring, inspection, improvement and standard-setting roles, which clearly are very important. Foster set them out as three groups: inspectorates, of which there were three, monitoring bodies, of which there were six, and those that help the sector improve and thus bring greater success to learners, of which there were eight. We have streamlined the first group already so that there is Ofsted for FE and the QAA for HE. We have spoken about foundation degrees already and about maintaining the role for the QAA, which is of paramount importance. In that debate, I did not hear calls from the Opposition to do away with the QAA or to merge its role; indeed, there was an insistence on the importance of that role. However, on this part of the Bill, the Opposition, looking for some cheap shots, argue differently.
The second group includes local authorities, regional development agencies and sector skills councils. Again, on Tuesday, the hon. Gentleman pointed out the importance to the learning and skills system of those bodies, and there was explicit and strong support from the Opposition for the sector skills councils. However, again, in this part of the debate, a different tune is played. It is also important that we are clear that those bodies are far more partners, bringing influence to bear, than bodies set up to regulate individual providers. We have already debated their importance and their role in delivering appropriate choice for young people and demand-led provision to meet the skills challenge. I know that the hon. Gentleman agrees with that.
The third group reflects our commitment to drive up standards and the importance of providing both expertise and support to the sector as a whole, as part of the wider reform agenda. But that group, too, has been streamlined; the DFES standards unit no longer exists in a separate form and the QIA has been established to simplify and support quality improvement across the sector.
When we consider the matter in the abstract, it is possible to call simplistically for further rationalisation. On one level that is attractive but, when we begin seriously to examine the detail, we often reach different conclusions. I shall give an example of that. I considered, and asked officials to consider, the possibility of merging the Learning and Skills Council and HEFCE, and I concluded that, were we to go down that route, we would create the largest funding and commissioning body outside the former Soviet Union. Given that, I do not think that it would be a sensible move to make. With respect, some of the calls for simplification are driven from a simplistic basis.
We are making changes and bringing about further rationalisation—that is not rhetoric. We are also working with the further education system as the proposals for self-regulation are developed. We as a Government, I as the responsible Minister, and the Secretary of State asked the further education body to come up with those proposals. Sir George Sweeney, as the chair of the self-regulation steering group, is working and consulting on self-regulation plans—work rightly being done by the sector, for the sector. We are also putting forward new freedoms for highly performing colleges, including action to develop collective sector ownership of quality improvement, including identifying and managing poor performance. I am confident that, if and when Sir George makes other proposals for any of the relevant bodies, they will be actioned where appropriate.
Will the Minister let the Committee know whether that analysis includes a measurement of the impact of bureaucracy on colleges, whether he has had an interim report on that and when he expects George Sweeney’s work to be reported back to Parliament so that Members of the House can play a role in debating and considering the issues?
I hope that it will report back within a relatively short period, to Ministers and then to the House. There is also a bureaucracy reduction group, which is making significant progress. As an example of that, the number of documents sent out by the Learning and Skills Council to colleges between January and March this year was 60 per cent. lower than in the same three months last year. It is a simply unsustainable contention that progress is not being made.
I turn to the hon. Gentleman’s point about annual reports. I genuinely do not believe that the new clause is necessary, as robust mechanisms already exist to hold both Ofsted and the LSC to account for how they discharge their responsibilities. Both have a statutory duty to publish annual reports and for the reports to be laid before Parliament. The LSC must ensure that is makes the best use of its resources when carrying out its duties, and the chief inspector of Ofsted must perform all his functions efficiently and effectively.
Parliament also recently established new governance arrangements in the form of a statutory board for Ofsted to hold the chief inspector to account for its work. The bureaucracy reduction group, to which I referred a moment ago, produces an annual report on the progress of our large non-departmental bodies. Important progress is being made and accountability structures and reporting mechanisms are in place. That should provide the reassurance that the hon. Gentleman is looking for.
As well as that, we said on Tuesday that we would return to the matter of efficiency savings. I want to set the record straight: the creation of the Learning and Skills Council was a significant step forward for the further education sector. We would not have had such a degree of progress in improving performance were it not for the work that the LSC has undertaken. It brought much-needed coherence to post-16 learning, with year-on-year improvements in performance, and it makes more than £50 million of year-on-year savings compared with its predecessor bodies, which existed when the Conservative party was last in government, when more money was spent on bureaucracy and administration than today. We therefore know that we have saved the equivalent of £50 million a year by merging the TECs and the Further Education Funding Council. Since 2001-02, the percentage of total LSC expenditure spent on administration has gone down from 4.6 to 1.9 per cent. That clearly represents the ongoing commitment of both the Government and the council to ensure that as much funding as possible gets to the front line of FE.
The theme 7 restructuring will save a further £40 million a year—savings that are already being redirected to the front line. We have always made it clear that that is the same £40 million that has been mentioned frequently during the Bill’s passage through this House and the other place. The £40 million is a combination of the statutory and non-statutory changes dealt with in “Agenda for Change” theme 7 and the measures in this Bill. I am talking about the abolition of 47 local learning and skills councils, the creation of a regional structure, non-statutory local partnership teams and a slimmer national office, facilitating reductions of 1,100 staff and 600 non-executives.
It is important that the Minister has clarified that, because there was doubt on Second Reading and during earlier discussions in Committee. I want it to be crystal clear. The Minister has now said that the £40 million is the £40 million is the£40 million—there is no additional £40 million. Is that the £40 million reported in the 2006 annual report?
I have made this point on numerous occasions. The £40 million refers to both the theme 7 restructuring and the changes included and anticipated within this Bill. If the hon. Gentleman is in any doubt about that, I urge him to talk to the Learning and Skills Council staff, who have gone through a very difficult restructuring process, in which 1,100 posts have been removed from the system. That, plus associated reductions in administration and rationalisation of premises, results in the £40 million savings, so the cumulative administrative savings since 2001 come to £500 million, which rightly has been realigned to support learners and students. We will also continue to expect efficiency gains each year in order to put more money back into front-line provision. The Government are asking all non-departmental public bodies to reduce their administrative costs by 5 per cent. each year.
All that is in stark contrast to the erroneous picture that the Opposition painted on Second Reading. All of it falls dramatically short of the £1.8 billion that the Conservative party erroneously claimed was the figure for LSC administration and bureaucracy. There was clearly an organised operation on Second Reading. Three or four Conservative MPs cited that figure in, in my view, a deliberate attempt to misrepresent the situation. The actual amount that is being spent on administration and bureaucracy, having been reduced significantly, is £220 million. To exaggerate the sum for administration and bureaucracy ninefold is a bit rich, even by the Opposition’s standards of dodgy accounting.
I understand—I have done some work on this—that the figure that the Conservatives reached was established by including the sums spent in 2005-06 on learner participation, learner support, local intervention and development, capital and other programmes. If the Conservative party is really saying that, for example, education maintenance allowances, which have brought about an unprecedented step change in participation at the age of 16, amount to bureaucracy and administration, it needs to talk to the young people who, at the age of 16, are receiving such significant support.
The commitment that I can give is this. If people look at the Foster report, the Leitch report and what the Government have said, they will see that there is a consistency about our belief that the Learning and Skills Council should continue to develop and evolve. The idea that we make progress by upping sticks, ripping up structures and starting again is not the way forward. We should be very firm in that view.