Education, Lifelong Learning and Culture Committee, 27 Feb 2008

Meeting date: Wednesday, February 27, 2008

Official Report 277KB pdf

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Proposed Subordinate Legislation

The second and final item on our agenda is consideration of correspondence from the Cabinet Secretary for Education and Lifelong Learning and the Minister for Community Safety on the charitable status of Scotland's colleges.

Committee members will see from the correspondence that the Scottish Government seeks the committee's view on its suggested approach to the possibility of colleges losing their charitable status. The Government intends to introduce a Scottish statutory instrument that will exempt colleges from the independence requirement in the charity test, thus enabling them to retain their charitable status.

I am keen to get the committee's views so that we can respond to the cabinet secretary. The matter has certainly concerned me. Howard Mckenzie, on behalf of further education establishments in Scotland, gave us some particularly good evidence on the effect that the loss of charitable status could have on their budgets and the dire consequences that they would face. I recognise that, in some dire circumstances, ministers might need to intervene in the management of further education establishments. That is important but, if it happens, the establishments cannot possibly pass the independence test.

To me, the Scottish Government's suggestion for addressing the problem is wise and worthy of support, but I am keen to know what other committee members think about it.

There is a debate to be had a long time in the future about whether colleges become fully independent. However, that debate is not for now, and I am happy to support the Government's proposal.

The potential financial cost to colleges of losing charitable status is worrying, and it is important that it is addressed. I imagine that the Government is not desperate to make up the £15 million that it would cost colleges not to have charitable status.

There are two potential routes to address the matter. One is to remove ministerial control, so that colleges pass the independence test. There is a strong argument that, in the long term, as Liz Smith said, colleges should be put on the same footing as universities, but I have more serious worries about governance in colleges than in the university sector. That might be slightly unfair, but a number of colleges have had difficulty, and any changes to their status should be part of a general review of governance. There are a number of governance issues; it is not just about ministerial control, which is not exercised often, if at all. The simplest and most obvious solution, therefore, is to make an exception for the colleges, and I support that.

I concur. I understand that there is a debate to be had, but the consequences for colleges if we do not support the proposal are too big a responsibility for us to bear.

That means that there is consensus in the committee that the suggested way forward—oh, sorry: Mary Mulligan wants to comment.

I do not want to comment specifically on the issue, as I do not have a problem with what the committee is agreeing to. However, I am a little puzzled as to why we are being asked for an opinion at this stage, rather than when the instrument is presented to us. Will that be the pattern for the future?

I am not sure. This is a new approach from the Government. It is not the normal way in which it would address such an issue—it would normally have laid the instrument—but I think that it is taking this approach partly because the cabinet secretary discussed the matter with us at the committee's away day. You were not present at that, Mary, because you had not joined the committee then. When she joined us at our away day, the cabinet secretary said that she was grappling with the issue and genuinely wanted the committee's views at an early stage to inform her deliberations. She listened to our views, so I think that that is part of the reason why she has written to us to advise us of her intention.

When you reply to the cabinet secretary, convener, it would be well worth thanking and commending the Government for its proactive approach. There will be difficulties in the future if it seeks our view before we see instruments but, without setting a precedent, we should say that committee members are grateful that the Government has given an early indication of its line of approach and are interested in seeing the instrument. Future pre-legislative scrutiny might involve the drafts of instruments but, as far as this matter is concerned, I am grateful that we have early sight of the Government's intentions. It is a good way forward.

You are correct to point out that the approach does not in any way prevent us from scrutinising the instrument fully when the Government lays it before the Parliament and the committee. We are being asked only to indicate whether we are content with the direction of travel, rather than guarantee that we will fully endorse the instrument. We will want to ensure that the instrument does what is proposed, and the appropriate time to test that will be when it is before us. However, there is consensus that we are content with how the Government is addressing the issue, that we appreciate the committee's continued involvement in the matter and that we look forward to receiving the instrument. I hope that it will offer some reassurance to our further education establishments, which have raised the potential loss of their charitable status with the committee.

Is the committee content for me to correspond with the cabinet secretary to advise her of our deliberations?

Members indicated agreement.

That concludes the meeting. Our next meeting will be on 5 March.

Meeting closed at 12:46.