I accept the point, but I re-emphasise therefore the importance of that person bringing in outside expertise to support them in the process. I also ought to make the practical point that we would be hard pressed to find many insolvency practitioners who had this expertise as a matter of course. Maybe there are one or two, but I do not know how many.
Mr Harris rightly made the point that the education administrator is similar to all the other special administrator roles, and I share his view. It is not necessary for the education administrator to have direct experience and knowledge of the education sector, but I expect—indeed, I am sure that we all expect—the education administrator to avail themselves of the advice and guidance of those around them. I am being a little repetitive, but this is an important point. I mean not only the management team and staff of the insolvent college but the governors, the further education commissioner, the local authorities and others. Indeed, I cannot conceive of a situation where an education administrator would act in isolation, developing their proposals for meeting the special objective and protecting students without first discussing them with a wide range of stakeholders.
Amendment 44 provides that the education administrator should be able to request information, advice and guidance from those with an understanding of education in performing their functions for the purposes of achieving the special objective. I wholly agree with the purpose of this amendment. Of course it will be important for the education administrator to take advice from experts in the sector in carrying out their functions. As I said, this is precisely how we expect the education administrator to operate. The leadership team in the further education body will be in place to provide support on the day-to-day running of the college and to provide information to assist the education administrator in their task of achieving the special objective, if possible. So too will the further education and sixth-form commissioners and their teams, as well as the officials in the Minister’s department. The education administrator will of course be free to seek advice from any other source that they may consider. We therefore believe that there is no need to provide in the Bill for something which the education administrator is free—and encouraged—to do.
I would make the point, as I often do in situations like this, that we want to be careful not to be too prescriptive in primary legislation, particularly when the Bill, as I said on Monday, really sets out a framework for how these processes should be managed. We do not want to be too prescriptive up front. I want to respond to a number of issues but I shall leave them until I have finished replying to this group of amendments, to be clear that I can cover everything that noble Lords have asked of me.
4.30 pm
In order to consider Amendments 42 and 43, we must look not only at Clause 22 but back to Clause 14. These clauses together create the special administration regime for the further education sector. As I hope I have made clear in all that I have said so far about this part of the Bill, our absolute priority in introducing the special administration regime is to ensure, as far as possible, the protection of students’ studies in the unlikely event that their institution becomes insolvent. That is clearly the purpose of Clause 14. I say straightaway in answer to the noble Baroness, Lady Garden, who asked whether the students or the creditors have priority, that the students have priority.
Clause 22 makes it equally clear that the education administrator must carry out their functions for the purposes of achieving the special objective, if possible. All other considerations in Clause 22—for example, in relation to creditors—are subject to pursuing that primary purpose, whereby the students take priority. There is no confusion or conflict here about the order of priority. I am afraid we say that Amendment 42 would add nothing to what is already enshrined in the Bill and would therefore serve no practical purpose. There is no need to qualify the statement made in the clause when it is the purpose. The education administrator must carry out their functions for the purpose of achieving the objective of the education administration, as set out clearly in Clause 14.
On Amendment 43, we are clear about what we are asking the education administrator to do: to carry out their functions so as to achieve the objective of avoiding
or minimising disruption to the studies of the body’s students. However, the special objective is exactly that: an objective, which does not and cannot guarantee a particular outcome. We are not providing a guarantee to every student on an individual basis. That would not be in the interests of either taxpayers or creditors. It is important to recognise that there may be some circumstances in which the objective cannot be achieved because of the particular circumstances of a college. The term “if possible” recognises that there can be no guarantee that the special objective can be achieved and that it is not a guarantee for every student.
The structure of having a statutory objective for a special administration is common to all special administration regimes, which operate on the same basis. The statutory objective is not a guarantee of continued service provision but provides an overarching aim that takes priority over creditors’ interests, which are themselves protected by having an orderly process in the event of the insolvency of a public service provider. Without that protection, it is unlikely that any insolvency practitioner would accept the appointment as education administrator. No administrator would personally accept the risk that it might prove impossible in a particular case to achieve the special objective. Without an insolvency practitioner there can be no special administration regime and, ultimately, no mechanism to protect the students’ studies. The key to all this is protecting the students’ studies.
I hope the Committee is persuaded that the Bill as drafted ensures that the protection of students is the primary purpose in accordance with which the education administrator must carry out their functions, and that the noble Baroness will therefore agree to withdraw this amendment.