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FURTHER EDUCATION
AND TRAINING BILL [HL]
EXPLANATORY NOTES
INTRODUCTION
1. These explanatory notes relate to the Further Education and Training Bill [HL] as introduced in the House of Lords on 20th November 2006. They have been prepared by the Department for Education and Skills in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.
2. The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.
BACKGROUND
3. The Bill implements proposals contained in the White Paper 'Further Education: Raising Skills, Improving Life Chances' (Cm 6768: published on 27th March 2006).
SUMMARY
Part 1 - The Learning and Skills Council for England
4. The Bill makes provision to restructure the Learning and Skills Council for England (LSC). The LSC is the principal public body charged with planning and funding further education provision.
5. The Bill also places new duties on the LSC in relation to encouraging diversity and increasing choice in education and training, consulting employers and learners and carrying out specified functions in accordance with strategies formulated by (i) bodies specified by the Secretary of State, and (ii) a body chaired by the Mayor of London where the Secretary of State has made provision in regulations for such a body to be established.
6 Proposals in the Bill extend the powers of the LSC to design, develop and operate support services for persons and bodies involved in education or training and for educational institutions.
7. The Bill also clarifies the power of the LSC to form and invest in companies.
Part 2 - Further Education Institutions
8. The Bill transfers the power to incorporate further education institutions and to dissolve further education corporations from the Secretary of State for Education and Skills to the LSC. It also transfers to the LSC the Secretary of State's existing powers of intervention (with some modifications), thereby enabling it to intervene in certain prescribed circumstances, including where a college is identified as underperforming or mismanaged.
9. The Bill enables the Secretary of State to make regulations requiring all college principals to achieve a stipulated leadership qualification before taking up a new post. At the moment, he can regulate only in relation to principals first appointed as such after commencement of the relevant provision in the Education Act 2002.
10. The Bill places a duty on further education institutions to have regard to guidance about consulting employers and learners.
11. The Bill clarifies the power of further education corporations to form or invest in companies and enables them to form or become members of charitable incorporated organisations. They may also use either power for the purpose of conducting an educational institution, with the consent of the LSC in relation to England and the Welsh Ministers in relation to Wales. This is currently not possible.
12. The Bill enables the Privy Council to grant further education institutions in England powers to award their own foundation degrees.
Part 3 - Industrial Training Levies
13. The Bill amends the Industrial Training Act 1982 to make it easier for Industrial Training Boards to demonstrate support for a levy proposal among employers in the relevant industry. It also requires that proposals for levy orders cover a three-year period, subject to certain exceptions.
Part 4 - Miscellaneous and General
14. The power of higher education institutions to form and invest in companies is clarified and there is a new power to form or become members of charitable incorporated organisations.
15. The Bill gives measure-making powers to the National Assembly for Wales in the field of education and training.
16. The Bill contains general provisions relating to regulations, commencement, extent, short title and other matters.
TERRITORIAL EXTENT
17. The Bill extends to England and Wales only with the following exceptions:
- clauses 10 and 11, which extend to Scotland;
- clauses 10 and 12, which extend to Northern Ireland;
- clauses 23 and 24 and Schedule 1 which amend provisions extending to Scotland;
- certain general provisions, which extend to the whole of the United Kingdom.
18. The Sewel Convention states that Westminster will not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament. At Introduction this Bill contains provisions that require the consent of the Scottish Parliament. The provisions relate to how industrial training boards demonstrate consensus for their levy proposals; the general requirement that industrial training boards submit levy proposals covering three years, rather than one; and the power for the LSC to operate loans and shared services. If further provision that requires the consent of the Scottish Parliament is included following amendment, this consent will be sought in line with the Sewel Convention.
TERRITORIAL APPLICATION: WALES
19. The Bill contains provision amending the Government of Wales Act 2006 to confer legislative competence on the Assembly. The amendment will allow the Assembly to make Measures containing any provision that could be made by Act of Parliament, subject to the restrictions in the 2006 Act, in respect of certain matters in the field of education and training.
20. For the sake of completeness, we also include here a list of all the provisions that apply to Wales in the Bill or which affects Wales and England differently.
21. The Secretary of State's powers to direct removal of principals and senior post holders and to create and dissolve further education colleges will not be exercisable by the LSC in relation to Wales. These powers are currently exercisable by the Assembly and will in future be exercisable by the Welsh Ministers.
22. Consent for colleges in Wales to form or acquire an interest in companies or charitable incorporated organisations for the purpose of conducting an educational institution would be obtained from the Welsh Ministers (in England it would be from the LSC).
23. Further education colleges in Wales will be required to have regard to guidance from the Welsh Ministers about consulting learners and employers.
24. Provision amending the requirement that industrial training boards demonstrate consensus for their levy proposals solely by reference to "relevant organisations" would apply in Wales.
25. Provision generally requiring industrial training boards to submit levy proposals covering three years, rather than one, would also apply in Wales.
26. Provision enabling the Learning and Skills Council to operate loans and shared services would operate in Wales only with the consent of Welsh Ministers.
COMMENTARY
PART 1: THE LEARNING AND SKILLS COUNCIL FOR ENGLAND
Clauses 1, 2, 3, 4 and 5: The Council
Restructuring the Council
27. The LSC was established by the Learning and Skills Act 2000 ("the 2000 Act") as a single body corporate. The 2000 Act placed the LSC under a duty to establish a committee of the LSC (to be called a local learning and skills council) for each area of England specified by the Secretary of State. The Act contained provisions about the members and staff of local councils, delegation of local council functions and the preparation of local council plans. The Secretary of State specified 47 such areas of England in relation to which the LSC established 47 local councils.
28. The 2000 Act also placed the LSC under a duty to establish a young people's learning committee and an adult learning committee.
29. The commitment to restructure the LSC was set out in the March 2006 White Paper 'Further Education: Raising Skills, Improving Life Chances'.
30. Clause 1 reduces the minimum size of the LSC National Council from twelve to ten.
31. Clause 2 places the LSC under a duty to establish a committee, to be called a regional learning and skills council, for each area of England specified by the Secretary of State. The clause requires regional councils to perform such duties as the LSC specifies. The clause also provides for the LSC to be able to specify functions that regional councils must, or may, exercise outside their area.
32. The clause empowers the Secretary of State to make provision about regional councils in regulations. Regulations may make provision about the membership of regional councils, the appointment of the members, chairman and staff of a regional council, the conferring of authority to exercise functions, the payment of salaries and allowances of members and chairmen and the regulation by a regional council of its own procedure.
33. The LSC is required to prepare guidance in relation to each financial year for each regional council, including the objectives which a regional council should achieve in seeking to carry out its functions, and the budget for the regional council in that financial year. The first set of guidance must be prepared as soon as reasonably practicable after this clause comes into force.
34. Clause 3 abolishes the local learning and skill councils and, as a consequence, current statutory provision in relation to them.
Strategy-making bodies
35. Clause 4 (inserted section 24A) provides the Secretary of State with the order making power to authorise a body to formulate a strategy in relation to specified functions of the LSC for either the whole of England or a part of it, but not exclusively either Greater London or a part of Greater London, and keep the strategy under review. This will enable strategies to be set either for a specified area in England in relation to specified functions of the Council or in relation to a particular education and training theme for the whole of England, where a theme relates to a function of the Council. The Council will be under a statutory duty to carry out any function to which a strategy relates in accordance with that strategy (inserted section 24C).
36. The clause (inserted section 24B) provides that the Secretary of State may, by regulations, set up a body to formulate a strategy setting out how the specified LSC functions are to be carried out in Greater London. The regulations must provide for the body to consist of the Mayor of London and other members appointed by the Mayor in accordance with the regulations. They must also provide for the Mayor of London to be chairman of the body.
37. The clause also makes provision (in inserted sections 24A and 24B) for the Secretary of State to give directions and guidance in relation to the formulation and review of strategies to deal with matters such as: the form and content of the strategy; the updating of the strategy; the steps to be taken by the body, and matters to which the body is to have regard, when formulating or reviewing its strategy; and the consultation to be carried out when the body formulates or reviews its strategy.
38. In formulating and reviewing its strategy, an authorised body, or the body chaired by the Mayor in London, must have regard to any guidance, and act in accordance with any directions, given by the Secretary of State. The LSC can disregard the strategy of an authorised body, or that of the body chaired by the Mayor, if that strategy has not been prepared in accordance with the requirements set out in the guidance and directions concerning formulation or review. If provision in a strategy of an authorised body or the body chaired by the Mayor conflicts with the LSC's strategy made in accordance with section 16 of the Learning and Skills Act 2000, the Council may disregard that provision in the body's strategy. Where there is a conflict between provisions in the strategies of different authorised bodies, including the body chaired by the Mayor in London, the LSC may disregard relevant provision in one or both of the strategies. The LSC is not required to carry out its functions in accordance with a strategy in a manner that it considers might involve disproportionate expenditure or if the strategy is considered by the LSC to be unreasonable.
39. The Council may not carry out a function in accordance with a strategy if in doing so it would fail to comply with a duty imposed on it by or under any enactment. Examples of such statutory duties include: the duty of the Council in section 16(2) of the 2000 Act to have regard to its own strategy in exercising its functions; the Council's duty in section 25(8) of the 2000 Act to comply with any directions given to it by the Secretary of State; and a condition of grant made under section 27(1) of the 2000 Act.
40. Where the LSC proposes not to, or does not, carry out a function to which a strategy relates the LSC must refer the matter to the Secretary of State and the body whose strategy it is may do so. Upon such a reference the Secretary of State may give such direction to the LSC as he thinks fit including a direction that a strategy be complied with to the extent specified in the direction.
Young people's learning committee and adult learning committee
41. Clause 5 removes the requirement that the LSC must establish a young people's learning committee and an adult learning committee, but the LSC retains its general power to establish such committees as it sees fit. This allows the flexibility, for example, for the LSC to set up a single group to advise on planning and funding for both young people and adults as a whole, should it so wish.
Clauses 6, 7, 8, 9, 10, 11, and 12: Functions of the Council
Duty on the LSC in relation to diversity and choice
42. Section 2 of the Learning and Skills Act 2000 imposes a duty on the LSC to secure the provision of facilities for education and training suitable to the requirements of 16-19 year-olds and section 3 imposes a similar duty in relation to persons aged 19 or more. Clause 6 provides that in performing those duties the LSC must act with a view to encouraging diversity in education and training and to increasing opportunities for individuals to exercise choice. This reflects commitments in the White Paper 'Further Education: Raising Skills, Improving Life Chances'.
43. The LSC will be expected to make whatever changes are necessary in order to effect an increase in the type and number of providers in the post-16 education and training market and in the opportunities available to individuals.
Consultation with learners and employers
44. Clause 7 requires the LSC to have regard to guidance from the Secretary of State about consulting with learners, with people likely to become learners and with employers on the funding and provision of learning. The clause does not define consultation nor does it specify how or when consultation is to be delivered. These issues will be included in the guidance. The clause specifies that guidance must provide for the views of a learner or a prospective learner to be considered in the light of his age and understanding.
45. The background to this clause is a Government commitment in the March 2006 White Paper 'Further Education: Raising Skills, Improving Life Chances' to create a demand-led system of further education provision, whereby funding follows the choices of employers and learners.
Plans for academic years
46. Clause 8 provides that the LSC must make and publish a plan for each academic year, rather than for each of its financial years. An academic year runs from 1 August to the following 31 July. This brings the LSC planning year in line with the planning and delivery arrangements of key partners such as further education colleges.
Power to form or be involved in certain bodies corporate
47. Clause 9 amends the LSC's current power to form or invest in companies, as set out in section 18 of the 2000 Act, to make it clear that the LSC can form any type of company, including companies limited by guarantee as well as companies limited by shares, with the consent of the Secretary of State.
48. Subsection (4) contains retrospective provision that ensures that companies limited by guarantee that have already been formed between 1 September 2000 and the date on which this clause comes into force were formed lawfully.
49. The clause also provides that the LSC's power to form charitable incorporated organisations (a new form of body corporate created by the Charities Act 2006) is subject to the consent of the Secretary of State.
Provision of services
50. Clause 10 will extend the powers of the LSC to design, develop and operate support services to persons and bodies exercising education and training functions, in relation to those functions. The LSC's current powers are in the 2000 Act. This provides that the LSC has powers and duties mainly in respect of post-16 education and training and in relation to England only. The powers are largely exclusive of higher education. These clauses will extend the powers of the LSC in this area to support higher education and to support learners under 16 and throughout the UK.
51. The provisions enable the LSC to offer support services such as software management systems, management information systems, payroll administration, human resources functions, finance services and procurement services, among others.
52. The LSC can provide these services to publicly-funded education and training providers (including schools and universities); publicly-funded institutions that have functions relating to the provision of education and training; and bodies specified by order (which may or may not be publicly funded).
53. The orders specifying additional persons or bodies may be made by the Secretary of State or, where a person or body has education and training functions only in Wales, Scotland or Northern Ireland, by the relevant devolved administration under subsection (8). Additional organisations may be specified in orders made by the Secretary of State or the devolved administrations at a later date.
54. In Wales, Scotland and Northern Ireland, these services will be supplied only with the consent of the respective devolved administrations. Separate consent will be required from each administration for each type of service.
55. The LSC will need to obtain the consent of the Secretary of State before making arrangements to provide support services to a person or body operating in Wales, Scotland or Northern Ireland.
56. The LSC will not need the consent of the Secretary of State before making arrangements to provide support services to an eligible body in England only, because this process will be regulated via accountability mechanisms that are already in place and by which the LSC currently reports to the Department for Education and Skills (DfES). These mechanisms include quarterly Ministerial Performance Reviews and a joint DfES/LSC Performance Forum, which assess the LSC's performance against criteria stipulated in the terms of an annual grant letter issued by the DfES.
57. An example of such a support service is the Managing Information Across Partners (MIAP) Programme, which will allow the LSC to manage the sharing of learner and learning data between learning and skills organisations, including higher education institutions and schools. This data, which includes information on participation and achievement, is currently held by a diverse range of owners. The LSC will manage the MIAP system on behalf of participating partners.
Assistance with respect to employment and training
58. Clause 11 widens the powers of the LSC to allow it to make arrangements in relation to Wales or Scotland for assisting persons to select, train for, obtain and retain employment. This would include arrangements for a loans scheme which would be available to learners undertaking either further or higher education. Consent of the devolved administrations will be required for arrangements made by the Secretary of State in relation to Wales and Scotland and the consent of the Secretary of State will be required for arrangements made by those devolved administrations. An example of this type of scheme is Career Development Loans (CDLs). The CDL programme operates across England, Wales and Scotland. It is delivered through high street banks, who offer loans on a commercial basis to learners undertaking vocational learning, including some higher education courses. The interest on loans is paid by Government funds during the period of learning.
59. Clause 12 enables the LSC to take part in similar arrangements, including provision for loans to be made available to individuals who are undertaking further or higher education, made by the Department for Employment and Learning in Northern Ireland. Consent of the Secretary of State is required for any such arrangements.
PART 2: FURTHER EDUCATION INSTITUTIONS
Clauses 13, 14, 15 and 16: Transferring powers to the LSC to establish and dissolve further education corporations.
60. The Government's White Paper entitled 'Further Education: Raising Skills, Improving Life Chances' contained a commitment to eliminate inadequate provision across the learning and skills sector by 2008. The Government also undertook to bring about significant improvements in those providers perceived to be coasting.
61. The policy intention in England is to enable the LSC to intervene quickly where a college is underperforming, mismanaged or inadequate. As part of a package of measures, the power to incorporate and dissolve colleges will be transferred from the Secretary of State to the Learning and Skills Council. As far as Wales is concerned, these powers will be exercised by the Welsh Ministers.
62. Section 16 of the Further and Higher Education Act 1992 ('the 1992 Act') enables the Secretary of State by order to establish a body corporate to conduct a new or existing educational institution. Such a body is known as a further education corporation. Section 27 of the 1992 Act enables the Secretary of State to provide by order for the dissolution of further education corporations and the transfer of their assets and liabilities.
63. The provisions for the publication of proposals for the establishment and dissolution of further education corporations under sections 16 and 27 of the 1992 Act are set out in section 51 of the 1992 Act and in regulations made under that section, i.e. the Education (Publication of Draft Proposals and Orders) (Further Education Corporations) (England) Regulations (SI 2001/ 782).
64. Clause 13 transfers the power to incorporate further education institutions in England under section 16 of the 1992 Act to the LSC. In Wales the power will be exercised by the Welsh Ministers.
65. Clause 14 transfers the Secretary of State's power to dissolve further education corporations in England under section 27 of the 1992 Act to the LSC. In Wales the power will be exercised by the Welsh Ministers.
66. Where it is proposed to dissolve a further education corporation, it may be necessary to transfer the property, rights and liabilities of a corporation to the LSC to achieve the best outcome for an area. In such a case the LSC will need to seek the agreement of the Secretary of State before making such provision.
67. Clause 15 amends section 51 of the 1992 Act which requires the LSC, when making a proposal to the Secretary of State to establish or dissolve a further education corporation under section 16 or section 27, to publish the proposal in a prescribed form and consider any representations made on it. The amendment makes appropriate modifications to reflect the transfer of power to establish and dissolve further education corporations from the Secretary of State to the LSC and the fact that for institutions in Wales, this power will be exercisable by the Welsh Ministers. It will be necessary to make consequential amendments to the regulations made under section 51 (see paragraph 63).
68. Clause 16 allows the Secretary of State to give directions to the LSC, where he takes the view that it would be appropriate for the LSC to exercise its powers under section 16 or 27 (establishment and dissolution of further education corporations). Such a case may arise where alternative provision is required quickly to meet the needs of learners. The LSC must comply with any directions given to it under section 51A as inserted by this clause.
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