Commentary Part 2: Further Education Institutions Sections 17 and 18: Intervention in further education institutions
71.The same policy intention lies behind sections 17 and 18 as lies behind sections 14 to 16 (see paragraph 63 above).
72.Section 17 inserts new sections 56A, 56B and 56C before section 57 of the 1992 Act. This amendment, in conjunction with amendments to section 57, has the effect of transferring the Secretary of State’s intervention powers (as set out in section 57), with modifications, to the LSC. This section will apply to further education colleges in England only.
73.Inserted section 56A empowers the LSC to take remedial action in elation to an institution within the further education sector in certain prescribed circumstances, such as where there is evidence that the provider is failing to meet the needs of its learners or is performing significantly less well than might be expected. Under such circumstances, the LSC may do one or more of the following: remove all or any of the members of the institution’s governing body; appoint new members of the governing body if there are vacancies; direct the governing body as it thinks expedient as to the exercise of their powers and performance of their duties.
74.The directions as to powers and duties that may be given include a direction to the governing body requiring them to make collaboration arrangements (within the meaning of section 166 of the Education and Inspections Act 2006) and a direction to a governing body (where they have power under their institution’s articles of government) to secure that they give effect to the procedures in those articles for considering the case for dismissal of a member of staff, where the LSC considers that it may be appropriate to dismiss that member of staff. A governing body must comply with any such directions.
75.Before taking action, the LSC must give the Secretary of State a notice stating which of the prescribed circumstances applies (or apply), the reasons why it is so satisfied, what it proposes to do and the reasons why it proposes to take that action.
76.At the same time as it takes action, the LSC must give the governing body a notice stating which of the prescribed circumstances set out in section 56A(2) applies (or apply) in the case of their institution, the reasons why it is so satisfied, and the reasons for taking the particular course of action (under section 56A(5)) which it has decided to adopt.
77.Inserted section 56B requires the LSC to prepare a statement of its policy with respect to the exercise of its intervention powers under section 56A and to keep it under review. The LSC is required to consult and to take account of representations when preparing a statement (or revised statement) of its policy. The Secretary of State may issue guidance about the preparation and review of statements and the LSC must have regard to it. Once prepared, a statement must be submitted to the Secretary of State. Where a statement is approved by the Secretary of State, he must lay a copy of it before Parliament and the LSC must publish it. The LSC must have regard to its most recently published statement when exercising or deciding whether to exercise any of its powers under section 56A.
78.Inserted section 56C enables the Secretary of State to direct the LSC to take action where he considers that the LSC has failed properly to exercise its powers of intervention under section 56A in the case of an underperforming or failing college. The LSC must comply with any directions given under this section. Inserted section 56C requires the Secretary of State to give the LSC a notice stating why he considers intervention is justified. Where the LSC takes action under section 56A in relation to an institution in compliance with a direction given by the Secretary of State, it must give the institution’s governing body copy of that notice (instead of the notice to the governing body required by section 56A).
79.As regards institutions in Wales, section 18 amends section 57 of the 1992 Act so as to alter the grounds for interventions in such institutions and to make it clear that Welsh Ministers are able to direct the governing body of an institution to initiate dismissal proceedings against a senior post-holder or to enter into collaboration arrangements. These changes mirror provision in inserted section 56A.
80.Section 18 provides that the Welsh Ministers must prepare a statement of their policy with respect to the exercise of their intervention powers, keep the statement under review and, if they consider it appropriate, prepare a revised statement. It also provides that, when preparing a statement or revised statement, Welsh Ministers must undertake such consultation as they think appropriate and consider any representations made to them about the policy to be set out in the statement; and that Welsh Ministers must lay any statement or revised statement before the National Assembly for Wales.
81.In order to give a fuller picture of how the policy intention described in paragraph 63 is put into effect, the following paragraphs set out the various provisions that will enable the LSC to take action where appropriate as regards the performance of further education institutions.
82.As noted in paragraphs 62 to 70, under sections 16 and 27 of the 1992 Act the Secretary of State or the Welsh Ministers may establish a body corporate to conduct a new or existing educational institution and may provide by order for the dissolution of further education corporations and the transfer of their assets and liabilities. Section 51 provides for the publication of proposals for the establishment or dissolution of further education institutions. Sections 14, 15 and 17 of this Act transfer these powers, with modifications, to the LSC in England.
83.The LSC will also continue to have relevant powers under the 2000 Act. Section 6 provides that the LSC may impose conditions when allocating its financial resources. If the conditions are not met, these resources may be withdrawn. Under section 27, grants made to the LSC by the Secretary of State may be the subject of conditions, including conditions on the funding of others by the LSC. Section 9 provides that the LSC may develop schemes to assess the performance of further education institutions and take these into account when allocating its financial resources.
84.Under section 11 of the 2000 Act, the LSC may appoint up to two governors of the governing body of an institution. It may use this power where it considers there has been mismanagement at the institution, or where it has concerns over the quality of provision.