Apprenticeships, Skills, Children and Learning Bill

My Lords, as the noble Lord, Lord De Mauley, said at the start of his remarks, this is a large and, you could say, diverse group of amendments. I hope I can respond to noble Lords with the courtesy and attention that all the amendments require. The noble Lord, Lord De Mauley, said that choice and innovation in the system are essential. I completely agree. I sense that we are all champing at the bit to have the debate about report cards, which will come to this House in the next Session; we are all looking forward to that. Of course, Ofqual has duties to have regard to reasonable levels of choice for learners and the desirability of facilitating innovation. The noble Lord, Lord De Mauley, should feel encouraged and reassured by that. He was particularly concerned that fee capping could limit innovation in the market and stop small qualification organisations from thriving. Ofqual will have to make sure that it does not do this; I am happy to say so on the record. It would risk not meeting its duty to have regard to the needs of learners if that were to happen. I detected a concern in the noble Lord’s remarks about the potential impact on the market of the fee-capping provisions, and the kind of research that we have done to look at that. The QCA does not have an efficiency objective at the moment. As the noble Lord knows, its main focus has been on standards. It has only recently begun to investigate the efficiency of the market, as concern has grown in recent years. The noble Baroness, Lady Walmsley, referred to this. There is a great deal more work to be done before the regulator could seriously consider a cap on fees. I think we will all agree that this work will become increasingly important as pressures on the public purse grow. Turning to the amendments relating to efficiency, it is important that Ofqual has an efficiency objective. I think we all agree on that. As the noble Lord, Lord De Mauley, and the noble Baroness, Lady Walmsley, reminded us, hundreds of millions of pounds of public money are spent on qualifications each year, and the taxpayer would rightly expect us to make sure that expenditure provides good value. I think we are as one on that. The ability to cap fees is a key power, needed to deliver the efficiency objective. The noble Baroness, Lady Perry, has argued that qualifications offer value for money. I am sure that she is right. The Association of Colleges argues equally forcefully, however, that they do not always offer value for money. There is a balance in here somewhere. If the association is right, Ofqual must be able to act. Given the debate in Committee, we have tabled amendments to place further constraints around the power. The noble Baroness, Lady Walmsley, was concerned to stop spiralling qualification fees in schools and colleges. A key part of the answer here is for Ofqual to have an effective but proportionate fee-capping power to meet its efficiency objective. The question of whether Ofqual can ensure that awarding bodies provide good information to help schools in efficient decision-making is, as the noble Baroness, Lady Walmsley, said, extremely important. Yes, Ofqual will be able to do this, and it would be appropriate for it to do so. We very much hope that it will provide such information. Amendment 165 sets a stiff test before Ofqual could impose a fee-capping condition. It must be necessary to cap fees to ensure value for money. The noble Baroness, Lady Walmsley, seeks to do something similar in her amendment. I am disappointed that she was not happy with our amendment because I think we are driving at the same thing. I am not sure how we can go forward on this; I hope that she will be able to support the government amendment because we have similar objectives. Amendment 167, alongside Amendment 168 in the name of the noble Baroness, Lady Walmsley, looks at an independent review of fee capping. This would change the review arrangements for the fee-capping decisions, so that they must be carried out by someone independent of Ofqual. As the noble Lord, Lord De Mauley, said, we are inching in the right direction. I am glad that he was able to support us. Again, I hope the noble Baroness will accept this in place of her amendment. The "independent of government" restriction in Amendment 168 is unnecessary. If Ofqual established new arrangements which were not independent of government, the arrangements would not be considered sufficiently credible and impartial. I would expect Ofqual to publish details of the review arrangements. Government Amendment 183, which looks at independent review of the withdrawal of recognition from an awarding body, is important. It makes the same changes to the review arrangements for withdrawal of recognition. Again, I hope the noble Baroness, Lady Walmsley, will accept this amendment in place of hers. We are attempting to achieve what the Committee flagged up as being extremely important. The final government amendment puts in the Bill our commitment to publish any guidance given by the Secretary of State on fee capping. This is a very important point, which noble Lords were concerned about. Index-linking fee increases would add to Ofqual’s objectives that fees should not increase above the rate of inflation. It would push Ofqual to use its fee-capping powers even where there was no problem with value for money. That is not the right way to go. It would risk stifling innovation and investment, which are extremely important. We should instead trust Ofqual to come to the right judgments about whether and when fee caps should be used. I assure the noble Baroness, Lady Walmsley, that Ofqual would have to assess the efficiency of relevant markets to deliver its efficiency objective. Before it could consider fee capping, I would expect it to have to move quickly in doing so. I will come to timeliness shortly. I am grateful to the noble Baroness, Lady Perry, for her generous remarks. If qualifications are value for money, with the amendments tabled today, Ofqual would not be able to cap. So she should have nothing to fear and I hope that I am reassuring her slightly. I was pleased that she made the point about timely not always being quick. I completely agree with her analysis. Timeliness does not always mean speed; it means "at an appropriate time". Ofqual has to perform all its functions in a reasonable, timely and efficient way. I have rather a legalese line to give here, but I hope the noble Baroness will be generous in listening. My advice is that Amendments 181 and 182 would make the legislation inconsistent. They imply that these words add something which would not be there if they were left out. I had to warn noble Lords that that was coming. The serious point is that Ofqual would have to act in a timely manner when carrying out all its obligations under the Bill. If the noble Baroness wishes me to, I will certainly consider how we can tackle this question of timeliness, but rationally, the efficiency objective should cover timeliness. If the House will forgive me, I will speak now to the amendments tabled by the noble Lord, Lord Lucas. Amendment 163 is about changing the names of qualifications. The noble Lord was also generous in his remarks. The amendment relates to the duty on Ofqual to seek to ensure that the number of titles for qualifications in similar subject areas, or serving similar functions, is not excessive. This provision, as the noble Lord reminded us, was debated at some length in Committee, and the noble Lord concluded by saying that our policy seemed to be immensely sensible. I welcome his support of our approach and I know that this amendment is trying to help us. I remain convinced, however, that the Bill delivers the policy intent and that this amendment would not work in practice. I will say how we envisage that the duty might be implemented in the hope that this can be equally helpful. Ofqual is required to have regard to the reasonable requirements of employers and will, in particular, have to have regard to information provided by sector skills councils. So we expect that Ofqual will require any awarding body that wished to offer, say, an engineering qualification to do two things—first, to reflect in the design of the qualification the expectations of engineering employers and secondly, to call the qualification by a specified name, such as "Level 3 Engineering". Provided that these requirements are met, Ofqual would not need to change the name of the qualification. If an awarding body wanted to put forward a qualification which did not meet the needs of employers and did not use the expected title, Ofqual would not need to consider whether it was, none the less, appropriate to regulate the qualification. If it did so, it would not be right for Ofqual to change the name of the qualification to "Level 3 Engineering". That title would mean that the qualification met the needs of engineering employers and so should not be used for a qualification that was not approved by the sector skills council. So in that way the amendment would not work. On Amendment 180, it has been suggested that this clause would give Ofqual a free rein to investigate the activities of any awarding body. I want to reassure noble Lords that this would not be the case. Ofqual, like any statutory body, can only use any of its powers to meet its objectives in ways that are consistent with its general duties. Before investigating a connected activity, Ofqual would have to be satisfied that doing so would support those objectives. It is hard to see how investigating an awarding body’s parliamentary briefings would help to meet Ofqual’s objectives. So this amendment is unnecessary. If Ofqual could not show that it was acting in a way that is consistent with its objectives and duties, it would be at risk of a successful challenge. I hope that my putting this on the record is helpful. I will close by saying how pleased I am that the noble Lord, Lord Lucas, was delighted by government Amendment 185. I, too, am delighted to be able to finish on a positive note. This amendment follows a commitment I made in Committee after hearing the debate on the noble Lord’s amendment. It gives Ofqual a role reviewing the allocation of points to qualifications for the purposes of achievement and attainment tables and, in future, the school report card. As with national curriculum tests, Ofqual will have a duty to review the delivery of government policies. This amendment allows Ofqual to require the Secretary of State to provide it with relevant information. I hope my reassurances will persuade noble Lords.