Clause
57
The Young
People’s Learning Agency for
England
Mr.
Hayes: I beg to move amendment 239, in clause 57,
page 37, line 26, leave out subsection (1)
and insert— ‘(1) There is to
be a body which is part of the Skills Funding Agency known as the Young
Person Learning Agency for
England.’.
The
Chairman: With this it will be convenient to discuss
amendment 105, in
clause 57, page 37, line 28, at
end insert— ‘(2A) The YPLA
is not permitted to employ more than 500 people in
total.’.
Mr.
Hayes: We are moving ahead with some speed now, but, none
the less, it is important that we hesitate to say a word or two about
amendment 239, which stands in my name and that of my hon.
Friends. The
purpose of the amendment is to probe the Government on the character of
the Young People’s Learning Agency. By that I mean that it is
the Opposition’s
view that the arrangements for the funding and management of skills
should be as consistent and coherent as possible. To that end, the
amendment removes the words: “there is to be
a body corporate known as the Young People’s Learning Agency for
England” and
replaces them with the
words: “there
is to be a body which is part of the Skills Funding Agency known as the
Young Person Learning Agency for
England.” The
arguments for that change are set out more clearly in the debate that
we are bound to have on clause 58. Essentially, we are
attempting to ensure that the YPLA and the SFA work in a coherent and
effective manner, and that the SFA provides an overall strategic vision
while the YPLA provides the funding. The aim is to minimise the
bureaucracy, the confusion, the convoluted arrangements and the
incoherence that is likely to dog the Bill in its current form. We look
forward to what the Minister has to say. As I have said, this is a
probing
amendment.
Mr.
Gibb: I want to speak to amendment 105, which is tabled in
my name and that of my hon. Friends. Clause 57 creates the Young
People’s Learning Agency as part of the range of quangos
replacing the Learning and Skills Council. As the National Union of
Teachers so pithily put
it: “We
are concerned about the creation of a plethora of new agencies, with
the Skills Funding Agency and the Young People’s Learning
Agency. We are in danger of exchanging the bureaucracy of the LSC for
two new
agencies.” And
the rest. As my hon. Friend the Member for Surrey Heath (Michael Gove)
said,
“The
Government’s answer to more bureaucracy is another bureaucratic
reorganisation. They are going to replace the Learning and Skills
Council with the Skills Funding Agency...and a sub-quango, the
National Apprenticeship Service, as well as with another quango, the
Young People’s Learning Agency.”—[Official
Report, 23 February 2009; Vol. 488, c.
47.] I fear
that that reorganisation may lead only to greater bureaucratic
overload. 6.15
pm My
hon. Friend the Member for Havant (Mr. Willetts) described
this as
“a good example
of a Government running out of steam and having to reorganise their own
reforms...They inherited the Further Education Funding Council,
which they abolished in 2001 in order to create the Learning and Skills
Council. In 2008, the 47 local learning and skills councils
were abolished and replaced by nine regional bodies and 150 local
partnerships. In 2010, the Learning and Skills Council that this
Government created is to be abolished and replaced by the Skills
Funding Agency, the Young People’s Learning Agency and the
National Apprenticeship Service. This is an example of endless
reorganisation.”—[Official Report, 23 February
2009; Vol. 488, c.
115.] Furthermore,
the YPLA and the SFA will, I understand, occupy the same premises as
the LSC in Coventry. In fact, the very same people will occupy the very
same premises in Coventry.
The LSC
employs 3,300 staff. 1,000 of them will transfer to local authorities,
500 will transfer to the YPLA and 1,800 will transfer to the SFA. In an
evidence session, the Under-Secretary of State for Innovation,
Universities and Skills, the hon. Member for Birmingham, Erdington
(Mr. Simon), in answer to a question put by
my hon. Friend the Member for South Holland and The Deepings about the
cost implications of this reorganisation,
said: “The
cost is already set out in the impact assessment; we have not memorised
it. It is on the
record.” Again
in response to my hon. Friend, he went on to say:
“This
change is not a cost-saving exercise; that is not why we are making it.
In the immediate term, it will be cost-neutral; in the long term, my
expectation is that the new structures will be more efficient and
cost-effective than the
LSC.” The
Minister for Schools and Learners
said: “For
clarity’s sake, the administrative cost of the new system,
including staffing and on-costs, will be met...by the LSC’s
current staffing budget. We expect that to be revenue-neutral, but
there will be some additional transitional costs. Savings will be made
by operating from a smaller estate of office premises...the SFA
will require fewer premises...Sharing will be facilitated by the
fact that the SFA and YPLA head offices will be located together in
Coventry.” When
my hon. Friend asked again what the “transitional costs”
would be, he was, alas, referred again to the impact assessment. As the
right hon. Gentleman said in the same evidence
session: “That
is certainly set out in full in the impact assessment. We can obviously
return to that during our
debate.”——[Official Report,
Apprenticeships, Skills, Children and Learning Public Bill Committee,
10 March 2009; c. 179-180, Q427, 428 and
429.] Here we
are, returning to it during our
debate. I
have the impact assessment here. On page 33, under a heading of
“Transition costs”, it
states: “Although
on-going costs of the new system will be revenue neutral there are
likely to be transition costs relating to premises and pensions and,
potentially, the transfer of the people from the LSC to their new
employers. There will be assets that can be realised to offset these
costs, such as the premises, though the current economic climate will
make the calculations more complex. Work on calculating these is
on-going and will proceed alongside the development of the designs for
the Young People’s Funding Agency and Skills Funding
Agency.” The
YPFA appears to be another quango that we are not aware of, unless
there is a typo in the impact assessment, because I thought that it was
called something else.
Jim
Knight: The Young People’s Learning
Agency.
Mr.
Gibb: So we now have another agency, or it is a typo in
the impact assessment. However, the key point about this impact
assessment is that, regarding these
costs: “Work
on calculating these is
on-going”. However,
I would have thought that they were set out in full in the impact
assessment, which both the Minister for Schools and Learners and the
Under-Secretary of State for Innovation, Universities and Skills
assured us about during the evidence sessions. Therefore, I hope that
the Minister for Schools and Learners will be able either to explain
his comments in the evidence sessions or perhaps he could write to
members of the Committee, setting out what those “Transition
costs” are, which we were assured have been calculated, so that
they can be put on the
record. As
for costs in the long run, the impact assessment
says: “We
expect ongoing costs of operating the new system to be revenue-neutral
compared to the current system in the short term, with savings and
efficiencies through a more integrated service at local authority level
in the medium to long term.”
Amendment 105
says: “The
YPLA is not permitted to employ more than 500
people”. That
is the number of LSC employees that will be transferred to the YPLA.
Now, I have just read out the statement from the impact assessment
that “We
expect ongoing costs of operating the new system to be revenue-neutral
in the short
term”. Therefore,
this prohibition should not be a problem for the Minister. Furthermore,
the impact assessment says that it is expected that there will
be “savings
and efficiencies...in the medium to long
term”, so
500 staff will be more than the YPLA is expected to
employ “in
the medium to long
term.” It
would help the Committee if the Minister could set out not only his
estimate of the transition costs but an estimate of the declining costs
that he expects over the medium term, as the efficiencies start to
yield savings. It would help if that was put in terms of staff numbers
as well as money.
The fear of
most commentators on the Bill, including the NUT, the Association of
Colleges and my hon. Friend, is that the reorganisation will create
more bureaucracy, more bodies for colleges to deal with, more meetings,
more consultations, more costs and more distractions. This is the
Minister’s opportunity to set out the facts and figures against
which the implementation of the reforms can be judged in the short,
medium and long term. If he cannot provide the numbers, we will
know that the expectations set out in his evidence and in the impact
assessment are nothing more than assertions based on
hope. Mr.
David Laws (Yeovil) (LD): It is a pleasure to join the
debate as we start the scrutiny of part 3. I do not want to detain the
Committee for too long just as we have started to make some swift
progress over recent
clauses. I
will touch on amendment 105, which the hon. Member for Bognor Regis and
Littlehampton has commented on. He raised many important issues that we
aired during the evidence sessions. As the hon. Member for South
Holland and The Deepings said, we will return to many of the issues
raised by amendment 239 under later clauses. However, this
is the obvious time at which to raise the concerns that the hon. Member
for Bognor Regis and Littlehampton touched on in relation to amendment
105. Amendment
105 initially has the appearance of a probing amendment, but it raises
two fundamental issues about many proposals in the Bill, including the
YPLA. First, are the Government’s cost estimates realistic and
serious? Secondly, what is the scale of the YPLA’s role expected
to be and will that change over time? According to the Government, the
academies programme is growing rapidly. That will surely have
implications for costs and staffing at the
YPLA. As
the hon. Gentleman mentioned, we had an interesting series of exchanges
with the Minister during the evidence session on whether there will be
cost savings from the reorganisation, the abolition of the LSC and the
establishment of the YPLA and other agencies. The Under-Secretary of
State for Innovation, Universities and Skills admitted that there would
not be net savings,
but that there would be broad neutrality apart from the set-up costs.
Whenever a Minister admits that there will be no cost savings, many
people immediately suspect that the changes could end up costing much
more than the Government
suggest. During
one exchange in the evidence session, the Under-Secretary of State for
Innovation, Universities and Skills indicated that at the least there
was a lack of clarity over whether the existing savings that are
assumed by the LSC and perhaps by the Department are embedded in the
cost estimates that the Government are proposing in relation to the
Bill. In other words, does the neutrality in the cost of these changes,
including the YPLA, take into account the proposals and measures
already in place to reduce the LSC’s estate and staffing? Those
have been significantly reduced over recent years. I understand that
those changes are expected to continue over the next couple of years,
not just in the rather unclear period after the existing spending
review, but between now and the end of the existing spending review in
2011.
Mr.
Hayes: The hon. Gentleman’s interesting remarks
follow from the discussion of these matters in the evidence session.
The implication is that the savings might be counted twice: once in the
Learning and Skills Council’s estimates, and again by Ministers,
who want to emphasise just how reasonable the changes are. Surely the
Minister would not be responsible for such double
counting.
Mr.
Laws: I am reassured that not only has the hon. Gentleman
spotted the point, but that he is clear that this Minister would not
tolerate such double counting. I hope that the Minister will assure us
in a moment that his partner Department is engaged in no such double
counting. Both hon. Members to whom I have just referred will know that
there are serious concerns about whether the
Government’s cost estimates are realistic, and whether
the additional agencies that are being established with their regional
presence will involve an additional cost that the Government
are masking by trying to bank the savings that are already in place
from scaling down the LSC and setting them off against the additional
costs that will arise from the
changes. We
know from the notes that the Government have circulated that they
anticipate additional costs when, for example, the YPLA is set up and
some of the responsibilities of academies are transferred from the
Department to the YPLA. Indeed, in the notes on the transfer of
academies under the section on finance and staff, the Government
acknowledge that moving the finance team to separate locations will
lead to loss of economies of scale. There is a further acknowledgment
towards the end of the notes on this section that the regional presence
of the YPLA—for example, in the oversight of
academies—will involve an additional cost, which is estimated at
£670,000 specifically for this narrow area of the YPLA’s
remit. I hope that the Minister will give us a cast-iron assurance that
there is no double counting, and that the Government’s estimate
of net neutrality in the cost of the changes in the Bill does not
already count the reductions in the number of staff and the size of the
estate, which would have taken place from 2009 to 2011
anyway. I also hope
that the Minister will tell us whether he can provide reassurance about
the future scale of the agency. Amendment 105 not only seeks to
constrain the up-front costs of establishing the YPLA and the other
machinery of Government changes, but it presumably also intends to cap
the size of YPLA’s staffing for the foreseeable future. Does
that sit happily alongside the Government’s future role for the
YPLA, which we will discuss on some of the later clauses? In
particular, is it consistent with the Government’s plans to
increase the scale of the academy programme, which will apparently
involve more staffing for the YPLA, and presumably more than would have
been the case if the functions had remained within the
Department, for the reasons relating to the higher regional costs that
are set out in the Government’s assessment of the cost changes?
Amendment 105 is useful, and I hope that it will flush out
some interesting data and comments from the
Minister.
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