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Baroness Sharp of Guildford: I thank the Minister for her reply. I take on board the reassurances she has given us on both issues. It is good to have it on the record and I am grateful to her for that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 98 and 99 not moved.]

Clause 16 agreed to.

Clause 17 agreed to.

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Clause 18 [Supplementary functions]:

Baroness Blatch moved Amendment No. 100:

    Page 8, line 19, leave out subsection (4).

The noble Baroness said: Often when one wants to have a discussion on a matter, the only way to do it is to table an amendment. It will therefore come as some relief to the Committee that I shall not be pressing Amendment No. 100.

I understand that there is some qualification about how the Secretary of State, if he thinks fit, will impose new powers or duties on the council for post-16 education. I have not had time to study the qualification, but I admit also that I have always found legalese difficult to read. I am anxious to know whether any order imposing a new power or duty would be caught by regulations that would need to come before both Houses through either the negative or the affirmative procedure. If it would not, I should be concerned to know that it should do so. I beg to move.

Lord Bach: The provision in the Bill follows the precedent of Section 8(4) of the Further and Higher Education Act 1992 which gives the Secretary of State a similar power in relation to the funding council. That power has been used on only one occasion, when last year the Further Education Funding Council took responsibility for the Government's new dance and drama provisions for talented students.

Just as the power under the 1992 Act has provided a useful safety net for an important scheme which the primary powers of the FEFC would otherwise rule out, so I should expect the similar powers in respect of the LSC to be used rarely. The Government set out their reasons for advocating the use of secondary legislation in that area to the Delegated Powers and Deregulation Committee. The noble Baroness will know that that expert committee did not see any need to draw any difficulties over such a power to the attention of the House.

The Secretary of State's power to confer or impose supplementary powers or duties on the LSC is limited in two important ways. First, any supplementary powers or duties must be within the ambit of the Secretary of State's functions. Secondly, they must be relevant to the provision of facilities for post-16 education and training. In response to the noble Baroness's question, as I understand it those regulations would be of the negative rather than the affirmative kind. I hope that that is to some extent the discussion that the noble Baroness sought on that topic. Having listened to what has been said, no doubt she will withdraw the amendment.

Baroness Blatch: I am grateful to the Minister. I wanted to know whether the regulations would come through the negative or affirmative procedure. From what the Minister said, my understanding is that they will come through the negative procedure. That reassures me. If the Minister had not explained that point I was going to come back to say that I recollect seeing a negative order concerning dance and drama

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when the power was transferred. I am looking across to the Front Bench opposite for nods in my direction, but there are none. I was simply going to ask for the same facility, but if the regulations are to come through the negative procedure, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.15 p.m.

On Question, Whether Clause 18 shall stand part of the Bill?

Baroness Blatch: I have tabled the Motion because Clause 18 begs so many questions that I believed that the best course of action would be to oppose it standing part of the Bill in order to try to discover exactly what it means.

We know that there are training and enterprise councils on independent corporations, but also that they have considerable assets. A number of issues arise from that point. First, the TUPE arrangements for the transfer of staff. I know that the Government have not yet pronounced on that matter. It would be helpful to know quite what that is to be. As I understand it, the assets of the training and enterprise councils will, as they wind up, in fact revert to the Secretary of State. If that is the case, where do those assets lie? Do they become subject to possible disposal or acquisition on the part of the clause?

Secondly, the powers relating to the acquisition and disposal of land and property are considerable. In Clause 18(2)(c), there is a reference to investing, "sums not immediately needed"--in other words, if there is money in the purse, there is the facility for investing. However, Clause 18(3)(c) states that they would be prevented from,

    "hold[ing] shares in a company, or otherwise becom[ing] a member of a company, unless the Secretary of State consents".

Does that mean that the only place that the money may lie is in a building society or a bank? It is difficult to know how free a body would be to invest money that is not around. We all know the importance of that: if money is lying around and not appreciating, its value is of course depreciating.

I turn to the reference to "gifts". I am slightly unnerved to see that the council will be free to accept gifts. I am not quite sure what that will mean and what the accountability system for receiving gifts and accepting financial resources will be. I am assuming that the reference to accepting financial resources relates to other providers in the field, but, again, I do not know. Subsection (3) states that the council will not be able to borrow or to lend money, with the caveat,

    "unless the Secretary of State consents".

I know that there have been instances from time to time where money has been lent. I am not so sure whether the local authority in Hammersmith and Fulham was given powers to lend money to some of the establishments in its authority because it was in particular difficulty this year. Not surprisingly, the

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Prime Minister has a direct interest in that authority. I do not know whether or not that was the reason for permission being given. I am concerned about the powers to lend and the criteria that would be used by the Secretary of State in agreeing to allow the council to lend moneys.

I have many questions about the clause, including the issue of risk. Will the Minister make some comment about risk: risk management; the degree to which the council will be able to engage in any activity when it is preserving and conserving its funds; the degree to which risk will be allowed and could be managed; and the degree to which the council would be accountable? Precisely which bodies would be making their land, property and assets available to the council for disposal and acquisition? I oppose the Question that the clause shall stand part of the Bill.

Lord Bach: I fear that I shall not be able to answer all the important questions raised by the noble Baroness. Of course, Clause 18 gives the national LSC additional general powers which it may exercise to enable it to perform its core functions. As she will know, that is a standard approach to ensure that an independent corporate body such as the LSC has the necessary powers to underpin its main functions. The powers enabling the LSC to form companies or take shares in a company may in practice involve facilitating appropriate partnership working at the local and national level for local workforce development or regeneration and economic development objectives. The powers of the FEFC were more limited in that area. If the LSC is to play an important role in local partnerships, as TECs do now, it is important that it has the appropriate powers.

I am sure that most noble Lords would support such activities which can add value and make a difference in local areas, in particular through levering in wider resources. Clause 18 provides the LSC with important supplementary powers to enable it to play the strategic powerful role in the community which we advocated in the White Paper and in the prospectus.

As regards TUPE and the assets of TECs, perhaps I may ask the noble Baroness to be patient and to wait until we debate Amendment No. 202 after Clause 84. That may be a more appropriate point to discuss assets.

As regards lending money, the circumstances in which we see that as both possible and a good thing, would be, for example, to help a provider with cashflow difficulties, and possibly also in the field of individual loans.

The noble Baroness referred to the use of gifts. That is nothing new. There is a provision to the same effect under Schedule 1 of the Act relating to the FEFC. As to her other detailed questions, it may be that some will be answered when we deal with the later amendment. Those are the considerations that we ask the Committee to bear in mind when asking that the clause stand part.

Lord Lucas: Perhaps I may follow up the noble Lord's remarks with a couple of extra questions. I

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should like him to take advantage of the extensive amount of time that we have available to us this evening to see whether he might reach into the resources available to him and give some explanation as to the kind of balance that the council will be asked to apply in regard to assets, risks and rewards.

The wording of the clause is very strange. It seems that the council will be able to speculate without restraint in land and property. It will be able to enter into contracts--so it can dance around the futures market if it can find a good reason for doing so. But it will not be able to lend money--in other words it will not be able to place money with a bank or building society, because that is letting out money at interest; it is lending money in any ordinary sense of the word. The clause provides no picture of the degree of prudence that the institution is meant to exercise. It will be allowed to invest sums, but if it cannot put them into a bank or building society (because it cannot lend) and it cannot invest in company shares, is it supposed to have some kind of weird gilt-edged "stock-swap" arrangement with the Bank of England? What exactly is going on when it comes to the management of short-term assets? I should appreciate some enlightenment from the noble Lord. I hope that he will find the time and resources to afford it to us this evening.

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