The legal angle

2nd March 2001 at 00:00
John Hall, head of education law at Eversheds, on college independence - eight years after Vesting Day

April 1, 1993, will go down in FE history as the dawn of a brave new era of operational independence. The eighth anniversary of Vesting Day presents a very different picture.

Behind the facade of corporate freedom, there always lay the statutory powers of the Secretary of State and the funding councils under the 1992 Further and Higher Education Act to set the agenda for colleges - to withhold and claw back funds, dissolve and merge corporations, remove governors, establish and discontinue funding methodologies, introduce new standards and (a sting in the tail) to modify the constitution of college corporations.

The Learning and Skills Act 2000 may have introduced a new statutory framework for post-16 education, but the Secretary of State still derives his main powers from the 1992 Act, and is about to exercise them again in driving through a range of changes to the College Instrument and Articles of Government.

The proposed changes are, of course, subject to consultation (the outcome of which will not be known until April 1) and many of them - especially the consolidation of the Instrument and Articles and the clearer role allocated to the clerk - should make college governance easier to understand and comply with.

However, the Department for Education and Employment's proposals also contain tell-tale signs of centralism at the expense of autonomy and a continuing preoccupation with the dark shadows cast by Halton and other scandals.

Take, for example, the proposal which would give the Learning and Skills Council power to appoint external auditors for colleges. It is at least debatable whether the 1992 Act authorises the Secretary of State to encroach on college autonomy in this manner, obtaining by regulation what could be secured through primary legislation.

That still leaves unanswered the question of whether the council's use of audit (direct or indirect as a result of auditor appointments) will be any more effective than the well-chronicled failures of its predecessor, the Further Education Funding Council. P> Then there is the proposed new power of summary dismissal to be given to corporation chairs in respect of principals and other senior post-holders. Doubtless, what officials may have in mind is a discreet telephone call from the chief executive of the local learning and skills council to the corporation chair, which will trigger the process leading to the removal of a principal who is in the firing line.

Surprisingly, what is missing from the DFEE's proposal is an explicit requirement that the process be a fair one, so that, for example, the principal has the right to a fair hearing if the grounds for dismissal are disputed. This could have serious implications under employment law, and threatens to replace one form of autocracy (that of a minority of college principals) with another (that of unaccountable chairs). Whatever happens to the modification, it is a pointer to Whitehall's current views on college freedom.

And what can be given one moment by one hand, can be taken away the next by the other. Having provided governors with statutory protection to apply to the courts for relief against personal liability in the Learning and Skills Act, the department is now suggesting that the power of corporations to insure governors should be removed.

This is a proposal which most company directors will find incomprehensible, since the right to seek relief from the courts is the ultimate fall-back remedy where all else, including insurance, has failed. It is hoped that ministers will draw back from the brink.

But the potential use of the Instrument and Articles to bend colleges one way or the other is at its most interesting in the department's consultation paper on Possible Flexibilities. This contemplates that the composition of college governing bodies could be modified so that the majority of members are drawn from a specified partner, for example the nominees of the local university or local authority or social club.

The imagination runs riot at the prospect of college boardroom "takeovers" endorsed by Whitehall. This could oil the wheels of local partnerships and alliances - or be the stuff of television drama.

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