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.]
In the event of a vote in the House this afternoon, I will adjourn the Committee for a quarter of an hour, or for half an hour if there is a subsequent vote, and so on.
It has become clear since those concerted claims were made on Second Reading that that figure has been cobbled together. Yes, it includes the £280 million that the LSC spends on administration and bureaucracy, but it also includes a further £1.5 billion, which most certainly is not spent on administration and bureaucracy, but which goes towards learner support, learner participation, local intervention, capital expenditure and educational maintenance allowances. To describe such expenditure as administration and bureaucracy is disingenuous, dishonest and downright deceitful.
The Minister is making a great deal of this; I think that he is slightly scarred from my scathing attack on him earlier today and that he is hurt. Understandably, he wants to get back at me a bit. The truth is that I have looked at my speech on Second Reading, to which he is referring, and I cannot find the details that he describes in the form that he describes.
Indeed, I looked at the breakdown of the LSC’s expenditure, and its annual report makes it absolutely clear that £1.8 billion of expenditure is not spent directly with those providing training. That is not to say that it is all wasted money—of course it is not—but that was the only point that I made, and I wish that the Minister would move on a little and talk about the business before us, rather than this exaggerated series of claims that he is making about the Conservative Opposition.
I am delighted that the hon. Gentleman has intervened and I ask him to refer to what the hon. Member for Daventry said:
“Even attenuated, the total cost of the LSC bureaucracy comes to £1.8 billion—a very heavy burden, and it comes out of what is available for front-line education.”—[Official Report, 21 May 2007; Vol. 460, c. 1020.]
“We know that the current spend on administration alone in LSCs is £1.8 billion.”—[Official Report, 21 May 2007; Vol. 460, c. 1059.]
If, as I gather from what the hon. Member for South Holland and The Deepings is saying, we are seeing an indication that the cat is out of the bag and the Opposition are backtracking, that is something that I very much welcome. The message that he has sent out by describing that £1.8 billion of expenditure as administration and bureaucracy is that those areas are ripe for cuts. If that is the case, it will be an enormous cause for concern to those young people in receipt of education maintenance allowance, which has brought about the biggest step change in participation in education at the age of 16 since the early 1990s; those in receipt of the care to learn grant; those in receipt of career development loans; those in receipt of dance and drama awards; and the colleges, which have seen their capital expenditure go from zero 10 years ago to £500 million per year today. All those items make up the £1.8 billion.
The Minister speaks of dance and drama awards. I have the LSC’s annual report here and he is absolutely right that serious money is spent on them—some £13.8 million. That contrasts with the £20 million spent by the LSC between 2003 and 2006 on management consultants. If we are to have a debate about bureaucracy and administration, let us have a straightforward one.
The Minister is right that not all the £1.8 billion spent is unnecessary—all organisations have administration costs—but the idea that the LSC is as lean and as fit as it might be would not resonate much up and down the country in the further education colleges, which desperately seek more funds to continue their excellent work.
We are seeing an eloquent, if misguided, attempt to backtrack. The claim that was clearly and explicitly made on Second Reading was that the LSC spends £1.8 billion on administration and bureaucracy. Today, we have demonstrated that that figure is £280 million, and I think that the hon. Gentleman is on the horns of a dilemma. I respect him and his integrity, based on his previous practice. Given his track record of integrity, he should either stand up and admit that the £1.8 billion figure used to describe administration and bureaucracy costs was a fabrication or signal the intention of a future Conservative Government to cut the programmes of education maintenance allowance, care to learn grants, career development grants, dance and drama awards, and capital expenditure. I will happily give way if he would like to intervene to clarify whether he acknowledges that the £1.8 billion claim was erroneous or, alternatively, that he intends to cut those expenditure programmes.
I will intervene to say that the only reference to that claim that I could find in anything that I have said in the House or elsewhere is drawn directly from the LSC’s annual report. That report says that more than £1 billion of the LSC’s annual budget of £10 billion does not reach bodies that provide training. That is not to say that all those management and administration costs are wasted; of course they are not. However, the Minister told the Committee, on this very day, that he is determined that the LSC should become ever more lean. Indeed, he told us that the LSC has cut the amount of paperwork that it sends to colleges by 60 per cent., which makes one wonder how much it was sending before.
We really must see an end to the discussion on the issue. You, Mr. Atkinson, will become impatient with it. Certainly the Committee is becoming impatient with it, as am I, despite my affection for the Minister.
My powers of perception are strong and I do not detect that Members on this side of the Committee are becoming dissatisfied with the debate. To be clear, the claim made on Second Reading by Conservative Members was that the LSC spends £1.8 billion on administration and bureaucracy. May I take the hon. Gentleman’s intervention to mean that he accepts that that claim is erroneous?
With your indulgence, Mr. Atkinson, and the Minister’s generosity, I draw his attention plainly to the LSC’s accounts. It is true that the £1.8 billion that is not spent directly on providing training is allocated to all kinds of other things, but a substantial amount of that is spent on administration, pay costs, depreciation, local intervention, development and other programmes—both non-DFES and otherwise. Not all that money is wasted, but I do not believe that a budget that is bigger than that of the Royal Navy—
I do not believe that the Minister, in his heart and in all honesty, believes that the LSC could not be more efficient and effective, and I think that he would do the Government and the Committee a favour if he acknowledged that.
I certainly acknowledge that the LSC has done and will do everything in its power to reduce its administration costs. That is why the proportion of spend on administration and bureaucracy has reduced from 4.6 to 1.9 per cent. of total spend. I take it from that intervention that the hon. Gentleman now acknowledges that £1.8 billion is not spent on administration and bureaucracy. The figure is £280 million, and it does not serve anyone’s interests to fabricate figures in that manner and present a completely erroneous picture.
Perhaps the hon. Lady is happy to allow the Conservative party to make those fabricated claims, but the issue relates to a serious and important debate. The significant point is that those claims are part of the way that the Conservative party sells the pass and creates the impression that it can make room for tax cuts without affecting public spending.
It is clear that the new clause is unnecessary. We have made clear the moves toward self-regulation and the ongoing rationalisation in the learning and skills landscape. We have made clear the reductions in bureaucracy that have taken place, and made it abundantly clear that there are strong and substantive reporting mechanisms for the LSC and Ofsted. On that basis, I hope that the Conservative party will withdraw the motion.
This is an extraordinary debate, because those on the Government Front Bench have not focused on the new clause. I tabled what I thought was a moderately worded proposal, requiring these matters to be analysed and then reported to the House. They intervened to ask exactly what form that report would take, what its findings would be and how we might respond to it. That seemed curious because the purpose of asking for a report is the expectation that there will be some kind of empirical analysis of the problem from which a reaction and a response might arise.
I have since been subject to what I can only describe as intimidation. I am a sensitive man, as you know, Mr. Atkinson—a sensitive, romantic high Tory—and the Minister has subjected me to a barrage of complaints about things that I have not said. I asked him to identify any mention in my speech on Second Reading of the matters that he has described, which he has failed to do. I reminded him that what I said had been fairly carefully worded because I do not like to say things that I cannot justify, although all politicians—I am not exempt from this—are subject, on occasion, to hyperbole. We do tend to dramatise for effect, as we saw from the Minister a few moments ago.
We have had no response to our sensible suggestion of a review and a report to Parliament, except from the hon. Member for Brent, East. She sensibly pointed out that the new clause should perhaps not be in the Bill, but should be taken seriously and considered by the Government. She is right that there is an issue with it being in the Bill, but, because of my absolute determination to hold the Government to account for the findings of the Foster report, which they commissioned, I am determined to press the matter. That report stated that the bureaucracy surrounding further education should be rationalised and that we should move with speed—indeed, with alacrity—towards self-regulation.
Sarah Teather rose—
The hon. Lady makes a fair point, and the Minister has already made a convincing argument in Committee about what should and should not be included in Bills, based on the flexibility that all Governments need. If I were sitting in his place, I might take a similar view, but I am not sitting there—yet—so I am performing the proper role of the Opposition, which is to press the Government and hold them to account. It is critically important that we do so on the issue of the bureaucracy and its cumulative effect on our further education colleges. We would be selling our colleges short if we did not. It is therefore my intention to press the matter and also return to it at a later stage in our consideration.
On that note, may we have no more of this slightly over-dramatic treatment of these matters and return to the diligent and considered study of proposals, which I think would do the Committee and the House considerably better service.