I beg to move, That this House
agrees with Lords amendment 34.

With this it will be convenient to discuss Lords amendments 35 to 38, 40 to 42, 65 to 71, 74, 77 to 82, 86, 113, 116, 117, 177 and 179 to 186.

The amendments are concentrated on crucial changes to the machinery of government to improve the delivery of education to young people and adults, and they demonstrate that we have listened to and taken seriously concerns from all sections of this House and the other place and worked hard to address them.

As the House will recall, local authorities will be supported in their new central role in commissioning services for 16 to 19-year-olds by the new Young People's Learning Agency. "Supported" is the right word, because the YPLA will be there to assist local authorities, not tell them what to do. That was always our clear intention. Throughout the passage of the Bill we have listened to those who were concerned that that principle was not always obvious, and we have accordingly made a series of amendments to clarify our intention and make it more explicit in the Bill.

Lords amendment 67 stipulates that when the YPLA uses its powers to commission provision, it must have regard to things done by local authorities as they perform their new duties in relation to young people aged 16 to 19, those aged 19 to 25 with a learning difficulty assessment and those subject to youth detention. Lords amendment 68 means that the YPLA will have to have approval from the Secretary of State before giving a direction to a local authority that is failing, or likely to fail, in its duties to secure provision for those groups of young people. I am due shortly to publish a consultation draft of the national commissioning framework, and I want to make it clear in that document that the powers in question will be used only as a very last resort and after all options of support and challenge have been explored and exhausted.

Lords amendment 70 extends the YPLA's duty to issue guidance to local authorities to cover other aspects of their new role.

Lords amendment 71 would give the YPLA a duty to consult local authorities and other persons it considered appropriate before issuing guidance about performance by local authorities of their new duties.

Lords amendments 179 and 180 set out that the first chief executive is to be appointed by the Secretary of State and later chief executives will be appointed by the YPLA, subject to the Secretary of State's approval. That is entirely consistent with the approach to other non-departmental public bodies. I know that the Opposition have some concerns about that, but, having listened to the anxieties expressed in the other place, we are of the opinion that the recruitment of an executive employee should be carried out by the employer-in this instance, the YPLA-rather than be a public appointment by the Secretary of State. We do not believe that the amendment would lead to an increased separation of the YPLA from the Secretary of State, but that it gives the YPLA, like other NDPBs, a sensible amount of power to appoint its own chief executive, subject to approval by the Secretary of State.

Are there other examples of that approach in non-departmental public bodies?

Last year, I took the Housing and Regeneration Bill through the House, and the appointment of the chief executive of the Homes and Communities Agency was almost entirely-word for word-consistent with the approach in the Bill. We are clear that that will not affect the clear lines of ministerial responsibility for the YPLA. The Secretary of State, through his remit letter to the YPLA, will set out the tasks that it must perform, including any necessary operational details, and the YPLA will be accountable to the Secretary of State, and hence to Parliament, for its performance and management. Its funding will be accounted for in the Department's expenditure plans. Under clause 75, the Secretary of State can give directions to the YPLA.

We had included a requirement for the YPLA, the Skills Funding Agency and local authorities to avoid provision that might give rise to disproportionate expenditure. Concerns were raised in another place that that could result in higher cost provision for learners with special needs no longer being made available-a possible get-out clause. That was never our intention. To minimise such concerns, we have removed the phrase "disproportionate expenditure". However, it is important to point out that we still expect those bodies to make the best use of their resources. Local authorities are already subject to best value duties under the Local Government Act 1999. The YPLA and the chief executive of the Skills Funding Agency are still required by the Bill to make the best use of their resources.

Lords amendment 41 introduces a requirement to consult governing bodies and other relevant parties before a local authority exercises its power to direct a college to take a named individual. I must stress that that is not a new power, but an existing power, which the Learning and Skills Council already has. The amendment would make explicit in the Bill the need for local authorities not to force through their wishes without consideration for governing bodies, but to consult any relevant colleges.

Although the majority of young people will find a suitable place to study further education with relative ease, we must ensure that local authorities have the tools and levers at their disposal to support the minority of young people who may struggle to find a suitable place of learning where they can thrive and achieve. In exercising that power, local authorities will be required to have regard to any guidance provided by the Secretary of State. We imagine that such a power would be used only in exceptional circumstances, and only once a young person, supported by independent advice and guidance, often through the local Connexions service, has exhausted all the available options. The amendment is particularly important to enable local authorities to support some of our more vulnerable groups of young people, such as ex-offenders, children in care or care leavers, who often face additional barriers to participation, to find a place to continue their education.

The powers are particularly relevant and necessary in the context of the historic legislation to raise the participation age. We want to ensure that no young person is disadvantaged and considered in default of their statutory duties just because they have been unable to find a suitable learning place. We believe that the change brought about by the amendment, which reflects what we would expect local authorities to do anyway, will help to reassure colleges about the use of that power.

Sixth-form colleges are some of our most successful educational institutions, popular with pupils and parents. I should like to mention Hartlepool sixth-form college, where I came from, which, in one of its first public acts since opening its new £24 million redevelopment, courtesy of Government money, played host on Friday evening to the BBC's "Any Questions?" and is a great example of the high-quality educational offer that sixth-form colleges can provide. The Bill will build on that success by creating a separate sixth-form college designation, enabling them to evolve as a sector.

Lords amendment 182 reduces the period before a sixth-form college can redesignate as a further education college from five to two years. Lords amendments 181 and 183 to 186 create a requirement for local authorities and the YPLA to consult governing bodies before using their powers to appoint governors. Again, we always expected that that would happen. Although the creation of the new designation has been generally popular, we hope that the changes in the Lords amendments will help to reassure sixth-form colleges about the operation of the new arrangements, and in particular show our intention to preserve the autonomy of sixth-form college governing bodies.

Lords amendments 34 to 37, 40, 42, 74, 77, 78, 81, 82, 116 and 117 are minor and technical changes to improve and clarify the drafting.

I hope that I have fully explained the reasoning behind the Lords amendments.

As the Under-Secretary said, the second group of amendments contains minor improvements, which we broadly welcome. He made it clear that Lords amendment 67 clarifies the relationship between the YPLA and local authorities, and that is helpful.

We have consistently argued that sixth-form colleges should be able to convert to a further education corporation after two rather than five years from when a sixth form college corporation is declared. I acknowledge that the Government have now accepted that argument.

The Government also conceded our point about requiring the YPLA and sixth-form colleges to consult the SFA before appointing someone to the board.

As the Under-Secretary said, Lords amendment 68 would make it clear that the YPLA had to get approval from the Secretary of State before issuing a direction to a failing authority.

Nevertheless, the amendments do not address the fundamental problems of the structure that the Bill proposes. The recession should surely have taught us that we need a dynamic and responsive system. Instead, the Bill represents the needless bureaucratisation of the management and funding of FE, skills, and in particular the apprenticeship system.

The abolition of the LSC, the creation of the three new agencies-the YPLA, the SFA and a National Apprenticeship Service-and the placing of further education under LEA control create a system whereby everyone has a say, but no one takes responsibility. Consequently, and perhaps without appropriate thought or planning, I suspect that the new system will be as bad as the LSC and possibly worse. It is more bureaucratic, has a greater capacity for contradiction, overlapping responsibilities and confused lines of accountability. At the very least, it is a wasted opportunity, given that we are getting rid of the LSC.

Represented diagrammatically, the system would be a mix of a Jackson Pollock painting and a Heath Robinson drawing. Represented musically, it would be Iron Maiden playing Shostakovich. It is, at best, an extremely muddled and mixed system. At worst, it risks jeopardising the interests of business, learners and the economy as a whole.

It is extraordinary that to that littered landscape the Government are adding a new, big role for regional development agencies. The many Government amendments we are now considering are an indication of just how complicated, and in my judgement unworkable, the arrangements that the Bill puts in place are likely to be in practice.

Amendment 180, which is to schedule 3-on the appointment of the chief executive of the YPLA-would enable

"Later chief executives...to be appointed" to

"the YPLA...on conditions of service determined by the YPLA".

We have serious concerns about this change, to which the Minister referred. The new conditions in question are set out in paragraphs 5(1) and (2) to schedule 3. In the initial draft of the Bill, the chief executive was to be appointed by the Secretary of State. Following changes resulting from the debate in the other place, now only the first chief executive will be appointed in that way-subsequent appointments will be made by the YPLA itself, but those will be subject to the Secretary of State's approval. I note what the Minister said on those terms.

That creates what was called in "Monty Python and the Holy Grail" a "self-perpetuating autocracy". It is an extraordinary further complication of what is already a complex system. We do not support that development. Reducing the powers of the Secretary of State over appointments to the YPLA has the effect of weakening democratic accountability. It is a further criticism of the structure that is being proposed-indeed, invented-by the Bill that the lines of accountability to this place are increasingly confused. Members will be concerned that amendment 180 reduces their authority over such matters still further.

The YPLA surely should be accountable to the House via the Secretary of State. That is the least we should expect. Since the Secretary of State should have the ultimate responsibility for the performance of the YPLA, surely it is important that he has sufficient authority over it, which should include something as important as the appointment of the chief executive.

One of the most damaging consequences of the proliferation of quangos under this Government has been the understandable sense among the public that those with power over their lives are shielded from democratic accountability. Agencies are not answerable to the public. That is why Ministers should retain control over appointments to quangos-so that they can answer for quangos' actions to the public through Parliament. If that does not happen, the link between power and elected accountability is inevitably degraded.

Quangos should operate at arm's length from the Government and the Minister with responsibility for them only in a defined and limited range of circumstances, which might include politically impartial decision making, transparent determination of facts or work of a specific technical or regulatory nature. My right hon. Friend the Leader of the Opposition addressed that in a speech on 6 July and explained how a Conservative Government would approach the management of quangos, which is particularly relevant to the debate on this group of amendments. He said:

"any delegation of power by a minister to a quango will not mean a corresponding delegation of responsibility...our goal is democratic accountability, not bureaucratic accountability".

Amendment 180 takes the opposite approach and is not consistent with accountable government of the kind described by him and, actually, of the kind that is dear to the hearts of all good parliamentarians, regardless of party affiliation.

In the other place, my noble Friend Lord De Mauley put the argument persuasively when he pointed out the different constitutional bases of the YPLA and the SFA. There are real doubts about the different personalities of those two organisations and the resulting difficulties of their relationship. He said that the SFA is an agency under the aegis of the Secretary of State, whereas the YPLA is a non-departmental public body. He went on to say:

"we express our opposition to" the

"government Amendments" which

"would allow the YPLA the power to appoint its own chief executive, albeit subject to the approval of the Secretary of State. If the YPLA is to exist, it should be held to account in the same way" as

"the SFA as an agency should be held to account. The principle of democratic accountability must hold fast"-[ Hansard, House of Lords, 2 November 2009; Vol. 714, c. 89.]

Part of the confusion that is likely to be created by the Bill will result from the different mechanisms by which those bodies are answerable to the House and to Ministers.

The Government are planning an immensely complicated system and it is not, frankly, widely welcomed in the sector. When I speak to people in the sector, they tell me that they too feel that it is going to be convoluted and may be difficult to navigate. The lines of accountability are not as they should be, as I have described. As a result, the new structure is not regarded as likely to be better than the LSC, which is quite an achievement; suddenly, the LSC has friends! The LSC was rather like the red army- though big, insensitive and expensive, it was at least predictable. The new system is anything but. Actually, it is less like Soviet Russia and more like Byzantium.

I am surprised, because the Minister is a good Minister, a diligent Member of the this House, a proud member of the Government Front-Bench team, and perhaps Hartlepool Sixth Form college's finest. I am surprised that he can, in all conscience, defend this indefensible cacophony, this awful blurred picture, this Jackson Pollock, Heath Robinson, Iron Maiden, Black Sabbath, Shostakovich structure. Perhaps he thinks it is better than a system that is streamlined, sensitive and responsive to need, and a system that could and would be understood by both learners and employers. I certainly do not.

Madam Deputy Speaker, you and everyone else will be relieved that I do not have any musical, theatrical, cinematic, artistic or any other analogies to make in my short remarks.

I am pleased that the Minister is so delighted by the capital investment in Hartlepool sixth-form college-he may indeed be its finest product-but that delight will not be shared by many of his Labour, let alone Opposition, colleagues, who have seen FE and sixth-form colleges in their constituencies starved of the funds they expected to receive following their capital programme bids over the past 12 months.

My only concern about this group of amendments is essentially what Mr. Hayes alluded to-how long is the arm's length between the Ministry, the Minister and the quango or non-department public body? The hon. Gentleman mentioned the soon-to-be-lamented Learning and Skills Council. Whenever things are going right in the sector, Ministers are keen to crow and take the credit, but when things go wrong, it is someone else's fault. For instance, when the capital programme went wrong, it was all the fault of the poor chief executive of the LSC, but the same could happen to the chief executive of the Qualifications and Curriculum Authority or any body.

I would like the same clarification as the hon. Gentleman. What is the nature of the relationship between the new chief executive of the YPLA, the Department for Children, Schools and Families and the Department for Business, Innovation and Skills? How accountable is that individual and his or her successors to this House, directly through the Minister, or through other parts of the House, such as the Public Accounts Committee? In my first two and a half years as a Member of the House, like Mr. Gibb, I was a member of the Education Committee, to which the head of Ofsted essentially reported. The head of Ofsted could be scrutinised directly by members of that Committee on how it was implementing policy-the Government were genuinely at arm's length. It would be good if the Minister could clarify how he sees the relationships to which I referred developing.

I pay tribute to Mr. Hayes. It was a remarkable achievement to mention Jackson Pollock, Iron Maiden, Shostakovich, Black Sabbath and Monty Python in the space of about 30 seconds. I imagine that that feat is unequalled in the history of the House.

I was pleased with the hon. Gentleman's agreement to the amendments on clarifying the role of the YPLA and local authorities, the governance of sixth-form colleges and other matters. His comments and questions, and those of Stephen Williams, were essentially about the new architecture of the machinery of government and how the YPLA will rightly be accountable to this House.

The hon. Member for South Holland and The Deepings said that the system for funding should be dynamic and responsive. I agree, and that is what we are moving towards. At the moment, colleges have a variety of different funding streams. If they are entrepreneurial, they will be approaching businesses in their area and providing bespoke training courses. The proposed machinery of government changes will provide much greater clarity, and that has been a constant theme throughout the Bill's passage, here and in the other place.

Local authorities will be in the driving seat, commissioning services from birth until the age of 19. They will be responsible for strategic planning, for commissioning for 16 to 19-year-olds, for sub-regional and regional working, for financial assurance and audit, and for provider performance management. The YPLA will be responsible for providing the framework, development and maintenance; for funding and allocation on a national basis; for direct commissioning and procurement; and for enabling informed commissioning to take place. Local authorities will have a strategic role in their areas, because they know what is important for their local vision in economic and social terms, and they will be in the driving seat. There will be a clear demarcation between provision up to the age of 19 and then post-19, and the Bill will provide important clarity on that point.

Providers on the ground will see significant benefits in terms of better informed and integrated commissioning of services and through streamlined performance management and data arrangements. For post-19 learners, there will be one account management system, as opposed to the current nine or 10 systems, and an automated settlement system that will pay colleges and providers in line with the choices made by learners and employers. Learners' decisions will drive the system: money will flow from the learner, which will provide the dynamic and responsive system that the hon. Gentleman mentioned.

The hon. Gentleman also said that the YPLA should be accountable to the House. It will be. As I said before, I have taken legislation through the House on the appointment of other non-departmental public body chief executives-for example, the Homes and Communities Agency and the Tenants Services Authority-and this provision takes the same approach. NDPBs are accountable to the House-chief executives can be called to the relevant Select Committees and the Public Accounts Committee. The YPLA will be required to publish its annual report to the House each year and the Secretary of State will still be accountable in terms of debates and questions. The accountability line is clear and is consistent with other NDPBs.

I am grateful to the Minister for his glowing tribute.

The point is that the legal personalities of the YPLA and SFA are very different. We were told at an earlier stage of consideration that a different model had been considered. Why did the Government come to the conclusion that those two organisations should have very different legal personalities, despite the relationship between them?

Certainly with regard to the YPLA and the national funding framework that will be introduced, we thought that it would be best to have an arm's length role so that Ministers would not be accused of interfering with specific funding allocations. That degree of impartiality is important. As I have said, the YPLA will have a clear line of accountability to the House through the Secretary of State, because its representatives can be called here by Select Committees and because of the annual report requirement-

rose-

I have obviously not satisfied the hon. Gentleman yet.

The Minister always brings immense charm to these proceedings, but he has not answered the question. We were told earlier that a different model had been considered by the Government for the legal personality of the SFA and the YPLA, and the relationship between the two. Why was this model adopted in preference to that one? Can he give me a straight answer?

I think that I have answered that question. The two organisations will serve two different constituencies, for want of a better phrase. The YPLA and the SFA will do different jobs and have different functions, so we thought that it was appropriate that they should have different funding models. It makes sense for the work to be done by two organisations. The structure provides a clear, coherent focus for young people on the one hand, and for employers and adults on the other.

We have just had the experience of the penultimate chief executive of the LSC resigning in response to the capital programme fiasco. Who will require the chief executive of the YPLA to resign if something goes wrong on his or her watch?

The chief executive will be accountable to the Secretary of State, so matters of delivery and performance management will be a matter for the YPLA board and the Secretary of State. Clear lines of accountability exist and, by the same token, the Secretary of State can also answer questions on that issue in the House. We think that it is right to make a distinction between the YPLA and the SFA because they provide two different approaches for two different customers. The clarity and responsiveness will be embedded in the system. On that basis, I hope that the House will agree with the Lords amendments.

Lords amendment 34 agreed to.

Lords amendments 35 to 42 agreed to.