New powers are set to be handed to the education secretary to force college mergers, an impact assessment of the Skills Bill has revealed.

The document has been published ahead of the actual Skill and Post-16 Education Bill, which has been laid in the House of Lords today.

It lists off 12 measures included in the Bill, which are predicted to cost around £112 million over the next decade.

In terms of intervention, the impact assessment explains that the education secretary can currently issue a direction to a college’s governing body and remove or appoint members of the governing body in certain circumstances.

But those powers “cannot be exercised in circumstances where there has been a failure to meet local needs, and cannot be used to direct structural change including mergers”.

Skills Bill
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Government proposes to “extend the existing intervention powers, enabling the Secretary of State to: exercise their statutory intervention powers in circumstances where there has been a failure by a college to adequately meet local needs; and direct structural changes (such as mergers) where use of the powers has been triggered under any of the thresholds in the legislation”.

The legislation will also “exempt any structural changes directed by the Secretary of State from the statutory merger control regime provided for in the Enterprise Act 2002”.

The impact assessment also reveals plans for a new “list of post-16 education or training providers who meet certain conditions”, as well as “the power for the Institute for Apprenticeships and Technical Education to charge fees to awarding organisations for qualification approval”.

And for the insolvency regime, the Bill says it will give “power for the Secretary of State to amend legislation to expressly provide for Company Voluntary Arrangements to be available in education administration”.

The breakdown of the £112 million cost is as follows: “Cost of producing local skills improvement plans to employer-representative bodies  (£25 million), FE providers (£11 million), and local stakeholders (£1 million). Cost to FE providers of having due regard to local skills improvement plans (£0.5 million).

“Statutory FE colleges to comply with duty to review provision in line with local needs (£5 million). Cost to employers of familiarising with new qualifications (£17 million). Awarding Organisations of new Institute qualification approval fee (£5 million) and additional qualification development to meet approval criteria (£46 million). Cost to employers of familiarisation with a new student finance system and the processing of new loans under the lifelong loan entitlement (£5 million).”


List of Skills Bill measures in the report’s own words:

The wider set of powers in the Bill and their relevant measure are as follows:

  1. The Lifelong Loan Entitlement: Modifying existing regulation-making powers in primary legislation to make specific provision for student finance in respect of modules of courses.
  2. Statutory Further Education intervention: Powers for the Secretary of State to intervene in the statutory FE sector in circumstances where there is failure to meet local needs, and for the Secretary of State to direct structural change (such as mergers) where use of statutory powers has been triggered.
  3. Technical Education qualification regulation: The power for the Institute to charge fees to Awarding Organisations (AOs) for qualification approval is an enabling power for regulations to be made by the Secretary of State.
  4. Insolvency regime: The power for the Secretary of State to amend legislation to expressly provide for Company Voluntary Arrangements (CVAs) to be available in education administration. 
  5. Teacher training quality: The enabling clause will allow the Secretary of State to make secondary legislation to regulate initial teacher training courses in the FE sector as deemed necessary.
  6. List of post-16 education or training providers: The power for Secretary of State to make regulations to set up a list of providers who meet certain conditions.


However, there are some changes that will be directly introduced by the passing of the Bill. These include the following parts of the listed measures:

  1. Local skills improvement plans: The duty on providers to co-operate with ERBs, and the duty placed on providers to have due regard to local skills improvement plans when making decisions about the provision of post-16 technical education and training.
  2. The duty placed on colleges and designated institutions to keep provision under review and consider what actions they might take to align provision with local needs.
  3. Measure improving the FE insolvency regime brings minimal direct change to the process of education administration, cementing existing policy on transfer schemes into legislation for those providers which enter education administration. 
  4. The Institute and new categories of technical qualification: The Institute will be given the power to define new qualification categories, approve qualifications in these categories, review the efficacy of approved qualifications and where appropriate withdraw their approval.
  5. Institute and Ofqual: This measure will require these two bodies to cooperate with one another when exercising their functions with respect to technical qualifications and will create a single approval gateway for technical qualifications. 
  6. OfS quality assessments: The clarification of the OfS’s methods of assessing quality as part of its regulation of higher education providers in England.



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