Apprenticeships, Skills, Children and Learning Bill

My Lords, Amendment 130 is a drafting correction to ensure consistency between Parts 3 and 4. In moving it, I will speak also to Amendments 131, 132 and 133. The latter amendments raise concerns about the timing and proposals around the new role for regional development agencies. I recognise these concerns and will explain the background. At the point that we created the Department for Business, Innovation and Skills, which sponsors both regional development agencies and the LSC, there was opportunity to reflect on the landscape in which the Skills Funding Agency will sit. In particular, we wanted to address significant concerns from business and other sectors about the overlap in roles between RDAs and the Learning and Skills Council. This analysis identified a compelling case for simplifying the landscape by embedding skills within the single integrated regional strategies agreed by the joint local authority and RDA partnership boards. Not only would this remove any potential duplication, it would also place skills firmly within economic development strategies. I understand the possible issues that this proposal may have raised in the context of this Bill and I believe that it may be helpful for me to provide reassurance to the House on a number of points about which I know noble Lords are concerned. First, why did we not announce this in the House? The main reason is that we wanted, before coming to a decision, to discuss the proposal with local authorities, regional development agencies, business sector organisations and other interested parties. That was the purpose of the letter from my noble friend Lord Mandelson to Jim Braithwaite in July. We are currently considering the responses we have received, most of which recognise the strong case for this change. Secondly, why does this change not require any amendment to the Bill currently before the House? The Bill is intended to establish the chief executive for the Skills Funding Agency as a statutory post-holder with specific funding responsibilities. It does not try to set out in detail every single function of the chief executive. So in the case of strategy setting, these functions are not described in this Bill, and because my department sponsors the regional development agencies, we can require them to take on this new role in respect of skills through administrative means. However, the Local Democracy, Economic Development and Construction Bill is putting in place the legislative framework for the single integrated regional strategies, which will now include skills. The Department for Business, Innovation and Skills will sign off these strategies and will ask the Skills Funding Agency to contract accordingly, ensuring that the agreed sectoral, regional and sub-regional priorities are met. I recognise that this is important context to the work of the Skills Funding Agency and, therefore, I welcome the opportunity for a full debate about it now. I know some have argued for a more sectoral approach. I would like to reassure the House that we are committed to ensuring that sectoral priorities are met under these arrangements. Our proposals will ensure that regional, local and sectoral needs are catered for. As I said earlier, we have written to a range of organisations about the proposals, including sectoral organisations such as the Alliance of Sector Skills Councils. Through the formal signing-off arrangements with the Secretary of State, we will make sure that the regional strategies include the sectoral priorities relevant to each region. We will be holding an event with the sector skills councils and other relevant organisations to make sure there is an effective system in place which meets the needs of the sector skills councils and others. On Monday, the noble Baroness, Lady Sharp, raised the issue of the importance of a bottom-up approach to strategy setting, with the involvement of all key partners. I would like to assure her that partnership is essential to the new system and I recognise the importance of involving local authorities. Partnership working is already happening in practice on the ground. The RDA and the local authority leader board in the West Midlands have recently written to Ministers emphasising how they are already working closely together to develop the single integrated strategy for their region and the importance they place on this as they build skills into those strategies. I am sure this good practice will be reflected across the rest of the country. I understand that the intention behind Amendment 132 is to probe how these arrangements will work with city regions, such as London. Let me first give reassurance that these changes will not affect the powers which currently exist for Greater London. The mayor will have the same relationship with the Skills Funding Agency as he does with the Learning and Skills Council. Similarly, Manchester is currently undergoing an assessment of its employment and skills board proposal, and we expect it to be awarded equivalent powers to London in relation to the Skills Funding Agency in due course. Leeds has not yet established its employment and skills board, but we have committed to help it do that and to consider it for the award of the same powers, probably in spring 2010. Leeds and Manchester are, of course, more complex than London because they sit within broader regions. In these cases it will be vital for the city and regional strategies to be fully aligned, so that the Skills Funding Agency has a clear and unambiguous statement of the skills needs on which to base its funding and contracting decisions. Manchester and Leeds city regions are putting protocols and agreements in place with their RDAs to make sure that their strategies align, and neither sees any difficulty in making this work. The Government will look at these arrangements and offer guidance to other areas which might in the fullness of time have similar issues. I hope this provides reassurance to the noble Baronesses and that they will not press their amendments.