Further and Higher Education Act 1992

Part I — Further education

Chapter I — Responsibility for further education

The new funding councils

Interpretation of Education Acts.

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The new further education sector

Full-time education for 16 to 18 year-olds

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Part-time education, and full-time education for those over 18

3

Persons with learning difficulties

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Finance

Administration of funds by councils

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Administration of funds: supplementary

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Grants to councils

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Further functions

Supplementary functions

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Assessment of quality of education provided by institutions

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Adjustment of local education authority sector

Functions of local education authorities in respect of secondary education

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Functions of local education authorities in respect of further education

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Provision of further education in schools

Provision of further education in maintained schools

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Provision of further education in grant-maintained schools

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General

Meaning of “further education”, “secondary education”, “school” and “pupil”

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Chapter II — Institutions within the further education sector

The further education corporations

Initial incorporation of existing institutions

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• (1) Before the appointed day the Secretary of State shall by order specify—

• (a) each educational institution maintained by a local authority which appears to him to fall within subsection (2) below, and

• (b) each county school, controlled school or grant-maintained school which appears to him to fall within subsection (3) below.

• (2) An institution falls within this subsection if on 1st November 1990 its enrolment number calculated in accordance with paragraph 1(1) of Schedule 3 to this Act was not less than 15 per cent. of its total enrolment number calculated in accordance with paragraph 1(2) of that Schedule.

• (3) An institution falls within this subsection if on 17th January 1991 not less than 60 per cent. of the pupils at the institution were receiving full-time education suitable to the requirements of persons over compulsory school age who have not attained the age of nineteen years.

• (4) On the appointed day a body corporate shall be established, for each institution so specified, for the purpose of conducting the institution as from the operative date.

• (5) The name given in the order under subsection (1) above as the name of the institution shall be the initial name of the body corporate.

• (6) Where an educational institution, being an institution maintained by a local authority or a grant-maintained school, has been established since 1st November 1990 or, as the case may be, 17th January 1991 by a merger of two or more institutions existing on that date, the institution shall be treated as falling within subsection (2) or, as the case may be, subsection (3) above if it would have done so if the merger had taken place before that date.

• (7) In this section “the appointed day” means the day appointed under section 94 of this Act for the commencement of subsection (4) above.

Orders incorporating further institutions

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• (1) The Secretary of State may by order make provision for the establishment of a body corporate—

• (a) for the purpose of establishing and conducting an educational institution, or

• (b) for the purpose of conducting an existing educational institution,

but shall not make an order in respect of an existing institution without the consent of the governing body.

• (2) Subsection (1) above does not apply to an institution which is maintained by a local authority.

• (3) The Secretary of State may by order make provision for the establishment of a body corporate for the purpose of conducting an institution which—

• (a) is maintained by a local authority, and

• (b) in his opinion, is principally concerned with the provision of full-time education suitable to the requirements of persons over compulsory school age who have not attained the age of nineteen years.

• (4) The name given in the order under this section as the name of the institution shall be the initial name of the body corporate.

• (5) An order under this section shall provide for the institution to be conducted by the body corporate as from the operative date.

“Further education corporation” and “operative date”

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• (1) In this Act “further education corporation” means a body corporate established under section 15 or 16 of this Act or which has become a further education corporation by virtue of section 33D or 47 of this Act.

• (2) In this Part of this Act “operative date”, in relation to a further education corporation and the institution, means—

• (a) in the case of a further education corporation established under section 15 of this Act, such date as the Secretary of State may by order appoint in relation to the corporations so established, and

• (b) in the case of a further education corporation established under section 16 of this Act, such date as the Secretary of State may by order appoint in relation to that corporation.

Principal powers of a further education corporation

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• (1) A further education corporation may—

• (a) provide further and higher education, and

• (aa) provide secondary education suitable to the requirements of persons who have attained the age of fourteeen years,

• (ab) provide education which is secondary education by virtue of section 2(2B) of the Education Act 1996 (definition of secondary education),

• (ac) participate in the provision of secondary education at a school,

• (b) supply goods or services in connection with their provision of education,

and those powers are referred to in section 19 of this Act as the corporation’s principal powers.

• (1A) A further education corporation may not provide education of a kind specified in subsection (1)(aa), (ab) or (ac) above unless they have consulted such local authorities as they consider appropriate.

• (2) For the purposes of subsection (1) above, goods are supplied in connection with the provision of education by a further education corporation if they result from—

• (a) their provision of education or anything done by them under this Act for the purpose of or in connection with their provision of education,

• (b) the use of their facilities or the expertise of persons employed by them in the fields in which they are so employed, or

• (c) ideas of a person employed by them, or of one of their students, arising out of their provision of education.

• (3) For the purposes of that subsection, services are supplied in connection with the provision of education by a further education corporation if—

• (a) they result from their provision of education or anything done by them under this Act for the purpose of or in connection with their provision of education,

• (b) they are provided by making available their facilities or the expertise of persons employed by them in the fields in which they are so employed, or

• (c) they result from ideas of a person employed by them, or of one of their students, arising out of their provision of education.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary powers of a further education corporation

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• (1) A further education corporation may do anything (including in particular the things referred to in subsections (2) to (4) below) which appears to the corporation to be necessary or expedient for the purpose of or in connection with the exercise of any of their principal powers.

• (2) A further education corporation may conduct an educational institution for the purpose of carrying on activities undertaken in the exercise of their powers to provide further or higher education and, in particular, may assume as from the operative date the conduct of the institution in respect of which the corporation is established.

• (3) A further education corporation may provide facilities of any description appearing to the corporation to be necessary or desirable for the purposes of or in connection with carrying on any activities undertaken in the exercise of their principal powers (including boarding accommodation and recreational facilities for students and staff and facilities to meet the needs of students having learning difficulties ... ).

• (4) A further education corporation may—

• (a) acquire and dispose of land and other property,

• (b) enter into contracts, including in particular—

• (i) contracts for the employment of teachers and other staff for the purposes of or in connection with carrying on any activities undertaken in the exercise of their principal powers, and

• (ii) contracts with respect to the carrying on by the corporation of any such activities,

• (bb) form, participate in forming or invest in a company,

• (bc) form, participate in forming or otherwise become a member of a charitable incorporated organisation (within the meaning of Part 11 of the Charities Act 2011),

• (c) borrow such sums as the corporation think fit for the purposes of carrying on any activities they have power to carry on or meeting any liability transferred to them under sections 27 to 27C or 33P of this Act and, in connection with such borrowing, may grant any mortgage, charge or other security in respect of any land or other property of the corporation,

• (d) invest any sums not immediately required for the purposes of carrying on any activities they have power to carry on,

• (e) accept gifts of money, land or other property and apply it, or hold and administer it on trust for, any of those purposes, and

• (f) do anything incidental to the conduct of an educational institution providing further or higher education, including founding scholarships or exhibitions, making grants and giving prizes.

• (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4AA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4AB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4AC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) A person has a learning difficulty if—

• (a) he has a significantly greater difficulty in learning than the majority of persons of his age, or

• (b) he has a disability which either prevents or hinders him from making use of facilities of a kind generally provided by institutions within the further education sector for persons of his age.

• (7) But a person is not to be taken to have a learning difficulty solely because the language (or form of language) in which he is or will be taught is different from a language (or form of language) which has at any time been spoken in his home.

• (8) A reference in this section to investing in a company includes a reference to becoming a member of the company and to investing in it by the acquisition of any assets, securities or rights or otherwise.

• (9) A further education corporation may provide advice or assistance to any other person where it appears to the corporation to be appropriate for them to do so for the purpose of or in connection with the provision of education by the other person.

Constitution of corporation and conduct of the institution

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• (1) For every further education corporation established to conduct an educational institution there shall be—

• (a) an instrument providing for the constitution of the corporation (to be known as the instrument of government), and

• (b) an instrument in accordance with which the corporation, and the institution, are to be conducted (to be known as articles of government).

• (2) Instruments of government and articles of government of further education corporations—

• (a) must comply with the requirements of Schedule 4, and

• (b) subject to that, may make such other provision as may be necessary or desirable.

• (3) The validity of any proceedings of a further education corporation, or of any committee of the corporation, shall not be affected by a vacancy amongst the members or by any defect in the appointment or nomination of a member.

• (4) Every document purporting to be an instrument made or issued by or on behalf of a further education corporation and to be duly executed under the seal of the corporation, or to be signed or executed by a person authorised by the corporation to act in that behalf, shall be received in evidence and be treated, without further proof, as being so made or issued unless the contrary is shown.

Initial instruments and articles

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• (1) As from the date on which a further education corporation is established, the instrument of government and articles of government—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Such . . . regulations—

• (a) may provide for all or any of the persons who, on the date on which a corporation is established to conduct the . . . existing institution, are the members of the governing body of the institution to be the initial members of the corporation, and

• (b) may make such other provision in relation to . . . existing institutions as appears to the Secretary of State necessary or desirable to secure continuity in their government.

• (3) In the case of a further education corporation established to conduct an institution which, on the date the corporation was established, was a maintained school, the governing body incorporated under section 19 of the Education Act 2002 shall, on the operative date, be dissolved.

Subsequent instruments and articles

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A further education corporation may modify or replace their instrument of government or articles of government.

Transfer of property, etc., to further education corporations

Transfer of property, etc.: institutions maintained by local education authorities

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Provisions supplementary to section 23

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Transfer of property, etc.: grant-maintained schools

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Transfer of staff to further education corporations

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Dissolution of further education corporations

Dissolution of further education corporations

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• (1) This section applies if a further education corporation propose that the corporation should be dissolved.

• (2) The corporation must publish—

• (a) details of the proposal, and

• (b) such other information as may be prescribed by regulations made by the appropriate authority.

• (3) The publication is to be in accordance with regulations made by the appropriate authority.

• (4) The corporation must consult on the proposal, and take account of the views of those consulted, in accordance with regulations made by the appropriate authority.

• (5) In this section, “the appropriate authority” means—

• (a) in relation to a further education corporation in England, the Secretary of State, and

• (b) in relation to a further education corporation in Wales, the Welsh Ministers.

Designation of institutions for funding by the councils

Designation of institutions

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• (1) The appropriate authority may by order designate for the purposes of this section any educational institution principally concerned with the provision of one or both of the following—

• (a) full-time education suitable to the requirements of persons over compulsory school age who have not attained the age of nineteen years, and

• (b) courses of further or higher education,

if the institution meets the requirements of subsection (2) below.

• (2) The institution must be one of the following—

• (a) a voluntary aided school (other than one belonging to a group of schools for which a foundation body acts under section 21 of the School Standards and Framework Act 1998),

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) an institution which is grant-aided or eligible to receive aid by way of grant or

• (d) an institution established for the purpose of being principally concerned with the provision of one or both of the kinds of education specified in subsection (1) above.

• (3) For the purposes of subsection (2)(c) above an institution is grant-aided or eligible to receive aid by way of grant if it is maintained by persons other than local authorities who—

• (a) receive any grants under regulations made under section 485 of the Education Act 1996, or

• (b) are eligible to receive such grants.

• (3A) The appropriate authority shall not make an order under this section in respect of a voluntary aided school without the consent of the governing body and the local authority.

• (3B) In this section “the appropriate authority”—

• (a) in relation to an educational institution in England, means the Secretary of State;

• (b) in relation to an educational institution in Wales, means the Welsh Ministers.

• (4) In this Part of this Act “designated institution” means an institution in relation to which a designation under this section has effect.

Government and conduct of designated institutions

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• (1) This section applies to a designated institution, other than—

• (a) an institution conducted by a company, or

• (b) an institution conducted by an unincorporated association, if the order designating the institution provides for its exemption.

• (2) For each designated institution to which this section applies, there is to be—

• (a) an instrument providing for the constitution of a governing body of the institution (to be known as the instrument of government), and

• (b) an instrument in accordance with which the institution is to be conducted (to be known as the articles of government).

• (3) In sections 29A to 29C—

• “instrument” means an instrument of government or articles of government;

• “regulatory instrument”, in relation to an institution, means—an instrument of government or articles of government, orany other instrument relating to or regulating the institution.

Special provision for voluntary aided sixth form colleges

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• (1) Notwithstanding anything in sections 29 to 29B of this Act, the instrument of government of a designated institution to which this section applies must provide—

• (a) for the governing body of the institution to include persons appointed for the purpose of securing so far as practicable that the established character of the institution at the time of its designation is preserved and developed and, in particular, that the institution is conducted in accordance with any trust deed relating to it, and

• (b) for the majority of members of the governing body to be such governors.

• (2) This section applies to—

• (a) an institution which, when designated, was a voluntary aided school, and

• (b) an institution specified, or falling within a class specified, by the Secretary of State by order.

• (3) The Secretary of State may specify an institution or a class of institutions only if the institution or each member of the class is principally concerned with the provision of the education specified in section 28(1)(a) above.

• (4) The reference in subsection (1)(a) above to the established character of an institution is, in relation to an institution established shortly before or at the same time as being designated, a reference to the character which the institution is intended to have on its establishment.

Designated institutions conducted by companies

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• (1) This section has effect in relation to any designated institution in Wales conducted by a company.

• (2) The articles of association of the company shall incorporate—

• (a) provision with respect to the constitution of a governing body of the institution (to be known as the instrument of government of the institution), and

• (b) provision with respect to the conduct of the institution (to be known as the articles of government of the institution).

• (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) The Secretary of State may give to the persons who appear to him to have effective control over the company such directions as he thinks fit for securing that—

• (a) the articles of association of the company, or

• (b) any rules or bye-laws made in pursuance of any power conferred by the articles of association of the company,

are amended in such manner as he may specify in the direction.

• (4) No amendment of the articles of association of the company (other than one required under subsection (3)(a) above) shall take effect until it has been submitted to the Secretary of State for his approval and he has notified his approval to the company.

• (5) Before giving any directions under subsection (3) above the Secretary of State shall consult the persons who appear to him to have effective control over the company.

Transfer of property, etc., to designated institutions

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Provisions supplementary to section 32

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Property, rights and liabilities: general

Making additional property available for use

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Voluntary transfers of staff in connection with section 34

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General provisions about transfers under Chapter II

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Attribution of surpluses and deficits

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Payments by council in respect of loan liabilities

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Control of disposals of land

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Wrongful disposals of land

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Control of contracts

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Wrongful contracts

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Remuneration of employees

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Miscellaneous

Collective worship

44

• (1) This section applies to any institution within the further education sector which is principally concerned with the provision of full-time education suitable to the requirements of persons over compulsory school age who have not attained the age of nineteen years.

• (2) An institution is of voluntary origin for the purposes of this section if—

• (a) immediately before it joined the further education sector it was a voluntary school (within the meaning of the Education Act 1996),

• (b) immediately before it joined the further education sector it was a foundation or voluntary school (within the meaning of the School Standards and Framework Act 1998) having a foundation established otherwise than under that Act,

• (c) it is designated for the purposes of this paragraph by order of the Secretary of State, or

• (d) it is formed by or for the purpose of merging two institutions both of which were within paragraphs (a) to (c).

• (2A) The governing body of an institution to which this section applies shall ensure that at an appropriate time on at least one day in each week during which the institution is open an act of collective worship is held at the institution which persons receiving education at the institution may attend.

• (3) In an institution of voluntary origin such act of collective worship shall —

• (a) be in such forms as to comply with the provisions of any trust deed affecting the institution, and

• (b) reflect the religious traditions and practices of the institution before it joined the further education sector.

• (4) In all other institutions to which this section applies such act of collective worship shall be wholly or mainly of a broadly Christian character in that it shall reflect the broad traditions of Christian belief but need not be distinctive of any particular Christian denomination.

• (5) If the governing body of an institution to which this section applies considers it appropriate to do so it may in addition to the act of collective worship referred to in subsection (3) or (4) provide for acts of worship which reflect the practices of some or all of the other religious traditions represented in Great Britain.

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) In the application of this section to an institution which is of voluntary origin by virtue of subsection (2)(d), subsection (3)(b) shall be taken as referring to the religious traditions and practices of the two institutions mentioned in subsection (2)(d).

Religious education

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• (1) This section applies to any institution to which section 44 of this Act applies.

• (2) An institution is of voluntary origin for the purposes of this section if it is of voluntary origin for the purposes of section 44 of this Act.

• (2A) The governing body of an institution to which this section applies shall ensure that religious education is provided at the institution for all persons attending the institution who wish to receive it.

Variation of trust deeds

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• (1) The Secretary of State may by order make such modifications as he thinks fit in any trust deed or other instrument—

• (a) relating to or regulating an institution within the further education sector, or

• (b) relating to any land or other property held by any person for the purposes of such an institution.

• (2) Before making any modifications under subsection (1) above of any trust deed or other instrument the Secretary of State shall so far as it appears to him to be practicable to do so consult—

• (a) the governing body of the institution,

• (b) where that deed or instrument, or any other instrument relating to or regulating the institution concerned, confers power on any other persons to modify or replace that deed or instrument, those persons, and

• (c) where the instrument to be modified is a trust deed and the trustees are different from the persons mentioned in paragraphs (a) and (b) above, the trustees.

Transfer of higher education institutions to further education sector

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• (1) The Secretary of State may by order provide for the transfer of a higher education corporation to the further education sector.

• (2) Where an order is made under this section in respect of a higher education corporation, sections 20 and 21 of this Act shall have effect as if, on the date the order has effect, the corporation were established as a further education corporation; and the order may make provision as to the initial name of the corporation as a further education corporation.

• (3) On such date as may be specified in the order the corporation shall cease to be a higher education corporation and become a further education corporation.

• (4) An order under section 28 of this Act in respect of any institution may revoke any order in respect of that institution under section 129 of the Education Reform Act 1988 (designation of institutions).

Statutory conditions of employment

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Avoidance of certain contractual terms

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• (1) This section applies to any contract made between the governing body of an institution within the further education sector and any person employed by them, not being a contract made in contemplation of the employee’s pending dismissal by reason of redundancy.

• (2) In so far as a contract to which this section applies provides that the employee—

• (a) shall not be dismissed by reason of redundancy, or

• (b) if he is so dismissed, shall be paid a sum in excess of the sum which the employer is liable to pay to him under Part XI of the Employment Rights Act 1996,

the contract shall be void and of no effect.

Information with respect to institutions within the further education sector

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• (1) The Secretary of State may by regulations require the governing body of any institution within the further education sector to publish such information as may be prescribed about—

• (a) the educational provision made or proposed to be made for their students,

• (b) the educational achievements of their students on entry to the institution and the educational achievements of their students while at the institution (including in each case the results of examinations, tests and other assessments),

• (c) the financial and other resources of the institution and the effectiveness of the use made of such resources, and

• (d) the careers of their students after completing any course or leaving the institution.

• (2) For the purposes of subsection (1)(d) above, a person’s career includes any education, training, employment or occupation; and the regulations may in particular require the published information to show—

• (a) the numbers of students not undertaking any career, and

• (b) the persons providing students with education, training or employment.

• (3) The information shall be published in such form and manner and at such times as may be prescribed.

• (4) The published information shall not name any student to whom it relates.

• (5) In this section “prescribed” means prescribed by regulations.

Publication of proposals

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Duty to provide for named individuals

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• (1) This section applies where an institution in Wales within the further education sector provides ... education suitable to the requirements of persons over compulsory school age who have not attained the age of nineteen years.

• (2) The ... National Assembly for Wales may by notice given to the governing body of such an institution—

• (a) require them to provide for such individuals as may be specified in the notice such education falling within subsection (1) above as is appropriate to their abilities and aptitudes, or

• (b) withdraw such a requirement.

• (3) The governing body of such an institution shall, for any academic year in respect of which they receive financial support from the ... National Assembly for Wales, secure compliance with any requirement in respect of any individual who has not attained the age of nineteen years which is or has been imposed by the ... National Assembly for Wales under subsection (2) above and has not been withdrawn.

Inspection of accounts

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• (1) The accounts of—

• (a) any further education corporation,

• (aa) any sixth form college corporation, and

• (b) any designated institution,

shall be open to the inspection of the Comptroller and Auditor General.

• (2) In the case of any such corporation or institution—

• (a) the power conferred by subsection (1) above, and

• (b) the powers under sections 6 and 8 of the National Audit Act 1983 (examinations into the economy, efficiency and effectiveness of certain bodies and access to documents and information) conferred on the Comptroller and Auditor General by virtue of section 6(3)(c) of that Act,

shall be exercisable only in, or in relation to accounts or other documents which relate to, any financial year in which expenditure is incurred by the corporation, or by the governing body of the institution in question, in respect of which grants, loans or other payments are made to them under section 15ZA or 18A of the Education Act 1996, section 14 of the Education Act 2002 or section ... 100 of the Apprenticeships, Skills, Children and Learning Act 2009.

Chapter III — General

Duty to give information

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• (1) Each of the following must give the Secretary of State such information as the Secretary of State may require for purposes connected with further education—

• (a) a local authority in England,

• (b) the governing body of any institution maintained by a local authority in England,

• (c) the governing body of a city technology college in England, a city college for the technology of the arts in England or an Academy,

• (d) the governing body of any institution in England within the further education sector or the higher education sector, and

• (e) any person or body who—

• (i) provides further education, and

• (ii) is receiving or has received funding to do so from the Secretary of State, a local authority in England , a combined authority established under section 103 of the Local Democracy, Economic Development and Construction Act 2009 or a combined county authority established under section 9(1) of the Levelling-up and Regeneration Act 2023.

• (2) Each of the following must give the Welsh Ministers such information as the Welsh Ministers may require for the purposes of the exercise of any of the Welsh Ministers' functions under any enactment—

• (a) a local authority,

• (b) the governing body of any institution maintained by a local authority, and

• (c) the governing body of any institution within the further education sector or the higher education sector.

• (3) Such information relating to the provision which has been made by a local authority in respect of any pupil at an institution as the authority may require for the purposes of claiming any amount in respect of the pupil from another authority under regulations under section 492 or 493 of the Education Act 1996 shall, where the institution becomes an institution within the further education sector, be provided to the authority by the governing body of the institution.

Inspection etc. of local education authority institutions, other than schools, and advice to Secretary of State

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• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) In relation to any local authority institution maintained or assisted by them, a local authority—

• (a) shall keep under review the quality of education provided, the educational standards achieved and whether the financial resources made available are managed efficiently, and

• (b) may cause an inspection to be made by persons authorised by them.

• (5) A local authority shall not authorise any person to inspect any institution under this section unless they are satisfied that he is suitably qualified to do so.

• (6) A person who wilfully obstructs any person authorised to inspect an institution under or by virtue of this section in the exercise of his functions shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.

• (7) In this section—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) “local authority institution” means an educational institution, other than a school, maintained or assisted by a local authority.

Directions

56

Intervention in the event of mismanagement or breach of duty

57

• (1) This section applies if one or more of the conditions listed in subsection (2) is satisfied regarding an institution in Wales within the further education sector; and it is immaterial whether or not a complaint is made by any person.

• (2) These are the conditions—

• (a) the Welsh Ministers are satisfied that the institution’s affairs have been or are being mismanaged by its governing body;

• (b) they are satisfied that the institution’s governing body have failed to discharge any duty imposed on them by or for the purposes of any Act or any Measure of the National Assembly for Wales;

• (c) they are satisfied that the institution’s governing body have acted or are proposing to act unreasonably with respect to the exercise of any power conferred or the performance of any duty imposed by or under any Act or any Measure of the National Assembly for Wales;

• (d) they are satisfied that the institution is performing significantly less well than it might in all the circumstances reasonably be expected to perform, or is failing or likely to fail to give an acceptable standard of education or training.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) If this section applies the Welsh Ministers may by order—

• (a) declare which of the conditions is (or are) satisfied, and

• (b) do one or more of the things listed in subsection (5).

• (5) They may—

• (a) remove all or any of the members of the institution’s governing body;

• (b) appoint new members of that body if there are vacancies (however arising);

• (c) give to that body such directions as they think expedient as to the exercise of their powers and performance of their duties.

• (5A) The directions that may be given to a governing body under this section include —

• (a) a direction requiring a governing body to exercise powers under section 5(2)(b) to (f) and (h) of the Education (Wales) Measure 2011 to collaborate with such persons and on such terms as may be specified in the direction., and

• (b) a direction requiring a governing body to make a resolution under section 27A(1) for the body to be dissolved on a date specified in the direction.

• (5B) A governing body to which a direction such as is mentioned in subsection (5A)(b) is given is to be taken for the purposes of section 27A(1) to have complied with section 27 before making the resolution required by the direction.

• (6) Directions may be given to a body under this section despite any enactment making the exercise of a power or performance of a duty contingent on the body’s opinion.

• (6A) The Welsh Ministers may not direct a governing body under subsection (5)(c) to dismiss a member of staff.

• (6B) But subsection (6A) does not prevent the Welsh Ministers, where they consider that it may be appropriate to dismiss a member of staff whom the governing body have power under their institution's articles of government to dismiss, from giving the governing body such directions under this section as are necessary to secure that the procedures applicable to the consideration of the case for dismissal of that member of staff are given effect to in relation to that member of staff.

• (7) A governing body must comply with any directions given to them under this section.

• (8) An appointment of a member of a governing body under this section shall have effect as if made in accordance with the instrument of government and articles of government of the institution concerned.

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reorganisations of schools involving establishment of further education corporation

58

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reorganisations, affecting provision for further education, of schools

59

Saving as to persons detained by order of a court

60

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation of Part I

61

• (1) In this Part of this Act—

• “functions” includes powers and duties,

• “modifications” includes additions, alterations and omissions and “modify” shall be construed accordingly, and

• “regulations” means regulations made by the Secretary of State or the Welsh Ministers.

• (2) References in this Part of this Act, except section 26, to the transfer of any person’s rights or liabilities do not include—

• (a) rights or liabilities under a contract of employment, or

• (b) liabilities of that person in respect of compensation for premature retirement of any person formerly employed by him.

• (3) In relation to any time before the commencement of section 65 of this Act, references in this Part of this Act and, so far as relating to this Part, Part III of this Act—

• (a) to institutions within the higher education sector are to universities, to institutions within the PCFC funding sector and to higher education institutions which receive, or are maintained by persons who receive, grants under regulations made under section 100(1)(b) of the Education Act 1944, and

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II — Higher education

The new funding councils

The Higher Education Funding Councils

62

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (a) shall have regard to the desirability of including persons who appear to him to have experience of, and to have shown capacity in, the provision of higher education or to have held, and to have shown capacity in, any position carrying responsibility for the provision of higher education and, in appointing such persons, he shall have regard to the desirability of their being currently engaged in the provision of higher education or in carrying responsibility for such provision, and

• (b) shall have regard to the desirability of including persons who appear to him to have experience of, and to have shown capacity in, industrial, commercial or financial matters or the practice of any profession.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) In this Part of this Act references to ... institutions in Wales—

• (a) are to institutions whose activities are carried on, or principally carried on, in ... Wales, but

• (b) include ... the Open University.

• (7A) In exercising their functions, the HEFCW shall have regard to the requirements of disabled persons.

• (7B) In subsection (7A) “disabled persons” means persons who are disabled persons for the purposes of the Equality Act 2010.

• (8) Any dispute as to whether any functions are exercisable by the HEFCW or the Office for Students shall be determined by the Secretary of State.

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dissolution of existing councils

63

• (1) On the appointed day—

• (a) the Universities Funding Council and the Polytechnics and Colleges Funding Council (referred to in this section as the “existing councils”) shall be dissolved, and

• (b) all property, rights and liabilities to which either of the existing councils were entitled or subject immediately before that date shall become by virtue of this section property, rights and liabilities of the Higher Education Funding Council for England,

but this subsection does not apply to rights or liabilities under a contract of employment.

• (2) Where—

• (a) immediately before the appointed day, a person (referred to below as “the employee”) is employed by an existing council (referred to below as “the existing employer”) under a contract of employment which would have continued but for the dissolution of the existing employer, and

• (b) the employee is designated for the purposes of this section by an order made by the Secretary of State,

the contract of employment shall not be terminated by that dissolution but shall have effect as from the appointed day as if originally made between the employee and the new employer.

• (3) In this section “the new employer”, in relation to the employee, means such higher education funding council as may be specified in relation to the employee by the order designating him for the purposes of this section; and in this subsection “higher education funding council” includes the Scottish Higher Education Funding Council.

• (4) Without prejudice to subsection (2) above, where that subsection applies—

• (a) all the existing employer’s rights, powers, duties and liabilities under or in connection with the contract of employment shall by virtue of this section be transferred on the appointed day to the new employer, and

• (b) anything done before that date by or in relation to the existing employer in respect of that contract or the employee shall as from that date be treated as having been done by or in relation to the new employer.

• (5) Subsections (2) and (4) above are without prejudice to any right of the employee to terminate his contract of employment if a substantial change is made to his detriment in his working conditions, but no such right shall arise by reason only of the change in employer effected by this section.

• (6) An order under this section may designate a person either individually or as a member of a class or description of employees.

• (7) In this section “the appointed day” means the day appointed under section 94 of this Act for the commencement of this section.

Transitional arrangements

64

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Funds

Administration of funds by councils

65

• (1) The HEFCW shall be responsible, subject to the provisions of this Part of this Act, for administering funds made available to the HEFCW by the Secretary of State and others for the purposes of providing financial support for activities eligible for funding under this section.

• (2) The activities eligible for funding under this section are—

• (a) the provision of education and the undertaking of research by higher education institutions in the HEFCW's area,

• (b) the provision of any facilities, and the carrying on of any other activities, by higher education institutions in their area which the governing bodies of those institutions consider it necessary or desirable to provide or carry on for the purpose of or in connection with education or research,

• (c) the provision—

• (i) by institutions in their area maintained or assisted by local authorities, or

• (ii) by such institutions in their area as are within the further education sector,

of prescribed courses of higher education, and

• (d) the provision by any person of services for the purposes of, or in connection with, the provision of education or the undertaking of research by institutions within the higher education sector.

• (3) The HEFCW may—

• (a) make grants, loans or other payments to the governing body of any higher education institution in respect of expenditure incurred or to be incurred by them for the purposes of any activities eligible for funding under this section by virtue of subsection (2)(a) or (b) above, and

• (b) make grants, loans or other payments to any persons in respect of expenditure incurred or to be incurred by them for the purposes of the provision as mentioned in subsection (2)(c) above of prescribed courses of higher education or the provision of services as mentioned in subsection (2)(d) above,

subject in each case to such terms and conditions as the HEFCW think fit.

• (3A) In the application of subsection (3) above to any grants, loans or other payments by the HEFCW, the reference to expenditure incurred or to be incurred by the governing body of a higher education institution as mentioned in paragraph (a) of that subsection includes a reference to expenditure incurred or to be incurred by any connected institution to which the governing body propose, with the consent of the HEFCW, to pay the whole or part of any such grants, loans or other payments.

• (3B) In subsection (3A) “connected institution”, in relation to a higher education institution, means any college, school, hall or other institution which the HEFCW are satisfied has a sufficient connection with that institution for the purposes of that subsection.

• (4) The terms and conditions on which the HEFCW may make any grants, loans or other payments under this section may in particular—

• (a) enable the HEFCW to require the repayment, in whole or in part, of sums paid by the HEFCW if any of the terms and conditions subject to which the sums were paid is not complied with, and

• (b) require the payment of interest in respect of any period during which a sum due to the HEFCW in accordance with any of the terms and conditions remains unpaid,

but shall not relate to the application by the body to whom the grants or other payments are made of any sums derived otherwise than from the HEFCW.

• (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) In this section and section 66 of this Act “higher education institution” means a university, an institution conducted by a higher education corporation or a designated institution.

Administration of funds: supplementary

66

• (1) Before exercising their discretion under section 65(3)(a) of this Act with respect to the terms and conditions to be imposed in relation to any grants, loans or other payments, the HEFCW shall consult such of the following bodies as appear to the HEFCW to be appropriate to consult in the circumstances—

• (a) such bodies representing the interests of higher education institutions as appear to the HEFCW to be concerned, and

• (b) the governing body of any particular higher education institution which appears to the HEFCW to be concerned.

• (2) In exercising their functions in relation to the provision of financial support for activities eligible for funding under section 65 of this Act the HEFCW shall have regard to the desirability of not discouraging any institution for whose activities financial support is provided under that section from maintaining or developing its funding from other sources.

• (3) In exercising those functions the HEFCW shall have regard (so far as they think it appropriate to do so in the light of any other relevant considerations) to the desirability of maintaining—

• (a) what appears to them to be an appropriate balance in the support given by them as between institutions which are of a denominational character and other institutions, and

• (b) any distinctive characteristics of any institution within the higher education sector for whose activities financial support is provided under that section.

• (4) For the purposes of subsection (3) above an institution is an institution of a denominational character if it appears to the HEFCW that either—

• (a) at least one quarter of the members of the governing body of the institution are persons appointed to represent the interests of a religion or religious denomination,

• (b) any of the property held for the purposes of the institution is held upon trusts which provide that, in the event of the discontinuance of the institution, the property concerned shall be held for, or sold and the proceeds of sale applied for, the benefit of a religion or religious denomination, or

• (c) any of the property held for the purposes of the institution is held on trust for or in connection with—

• (i) the provision of education, or

• (ii) the conduct of an educational institution,

in accordance with the tenets of a religion or religious denomination.

Payments in respect of persons employed in provision of higher or further education

67

• (1) In section 133 of the Education Reform Act 1988 (payments by PCFC in respect of persons employed in the provision of higher or further education) for subsection (1) there is substituted—

(1) A higher education funding council shall have power to make payments, subject to such terms and conditions as the council think fit, to— (a) any local authority in their area; (b) the London Residuary Body; (c) the London Pensions Fund Authority; and (d) the governing body of any institution designated under section 129 of this Act, as originally enacted; in respect of relevant expenditure incurred or to be incurred by that authority or body of any class or description prescribed for the purposes of this section.

• (2) In subsection (2)(a) of that section (meaning of relevant expenditure) after “education authority” there is inserted “ the London Residuary Body or the London Pensions Fund Authority ”.

• (3) At the end of subsection (3) of that section (meaning of references to higher and further education) there is added “ and in any other case the reference to further education shall be read as a reference to further education within the meaning of section 41 of the 1944 Act as that section had effect on that date ”.

• (4) In subsection (4) of that section (duty to give information) after paragraph (a) there is inserted—

(aa) the London Residuary Body; (ab) the London Pensions Fund Authority

.

• (5) That section as originally enacted shall have effect, or be treated as having had effect, as if—

• (a) in subsection (1), in relation to anything done before regulations for the purposes of that subsection were in force, the words “of any class or description prescribed for the purposes of this section” were omitted, and

• (b) in subsections (1) and (2) the references to a local authority included the London Residuary Body and the London Pensions Fund Authority.

Grants to councils

68

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Further functions

Supplementary functions

69

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) The HEFCW shall keep under review activities eligible for funding under section 65 of this Act.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assessment of quality of education provided by institutions

70

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Institutions in the higher education sector

Higher education corporations: constitution and conduct

71

• (1) After section 124 of the Education Reform Act 1988 there is inserted—

(124A) (1) For each higher education corporation established on or after the appointed day there shall be an instrument (to be known as the instrument of government) providing for the constitution of the corporation and making such other provision as is required under this section. (2) The initial instrument of government of a higher education corporation established on or after that day shall be such as is prescribed by an order of the Privy Council. (3) An order of the Privy Council may— (a) make an instrument of government of any higher education corporation with respect to which Schedule 7 to this Act has effect or make a new instrument of government of any higher education corporation in place of the instrument prescribed under subsection (2) above; or (b) modify an instrument made in pursuance of this subsection. (4) An instrument of government of a higher education corporation— (a) shall comply with the requirements of Schedule 7A to this Act; and (b) may make any provision authorised to be made by that Schedule and such other provision as may be necessary or desirable. (5) An order under subsection (2) or (3) above may make such provision as appears to the Privy Council necessary or desirable to secure continuity in the government of the institution or institutions to which it relates. (6) The validity of any proceedings of a higher education corporation for which an instrument of government has effect, or of any committee of such a corporation, shall not be affected by a vacancy amongst the members or by any defect in the appointment or nomination of a member. (7) Every document purporting to be an instrument made or issued by or on behalf of a higher education corporation for which an instrument of government has effect and to be duly executed under the seal of the corporation, or to be signed or executed by a person authorised by the corporation to act in that behalf, shall be received in evidence and be treated, without further proof, as being so made or issued unless the contrary is shown. (8) In relation to a higher education corporation for which an instrument of government has effect the members of the corporation for the time being shall be known as the board of governors of the institution conducted by the corporation. (9) The Secretary of State may by order amend or repeal any of paragraphs 3 to 5 and 11 of Schedule 7A to this Act. (10) In this section and section 124C “the appointed day” means the day appointed under section 94 of the Further and Higher Education Act 1992 for the commencement of section 71 of that Act. (124B) (1) It shall be the duty of each corporation— (a) to keep proper accounts and proper records in relation to the accounts; and (b) to prepare in respect of each financial year of the corporation a statement of accounts. (2) The statement shall— (a) give a true and fair account of the state of the corporation’s affairs at the end of the financial year and of the corporation’s income and expenditure in the financial year; and (b) comply with any directions given by the higher education funding council as to the information to be contained in the statement, the manner in which the information is to be presented or the methods and principles according to which the statement is to be prepared. (3) The corporation shall supply a copy of the statement to any person who asks for it and, if the corporation so requires, pays a fee of such amount not exceeding the cost of supply as the corporation thinks fit. (4) The accounts (including any statement prepared under this section) shall be audited by persons appointed in respect of each financial year by the corporation. (5) The corporation shall consult, and take into account any advice given by, the Audit Commission for Local Authorities and the National Health Service in England and Wales before appointing any auditor under subsection (4) above in respect of their first financial year. (6) No person shall be qualified to be appointed auditor under that subsection except— (a) an individual, or firm, eligible for appointment as a company auditor under section 25 of the Companies Act 1989; (b) a member of the Chartered Institute of Public Finance and Accountancy; or (c) a firm each of the members of which is a member of that institute. (7) In this section, in relation to a corporation— - “the first financial year” means the period commencing with the date on which the corporation is established and ending with the second 31st March following that date; and - “financial year” means that period and each successive period of twelve months. (124C) (1) The Secretary of State shall be the appointing authority in relation to the appointment of the first members of a corporation established on or after the appointed day and, in determining the number of members to appoint within each variable category of members, he shall secure that at least half of all the members of the corporation as first constituted are independent members. (2) In subsection (1) above “variable category of members” and “independent members” have the same meaning as in Schedule 7A to this Act. (3) The following provisions apply where an instrument of government is made under section 124A of this Act for a higher education corporation with respect to which Schedule 7 to this Act has effect. (4) The instrument shall apply, subject to subsection (5) below, as if the persons who, immediately before its coming into effect, were the members of the corporation had been appointed in accordance with the instrument for the residue of the term of their then subsisting appointment. (5) Any local authority nominee, teacher nominee, general staff nominee or student nominee (within the meaning, in each case, of Schedule 7 to this Act) shall cease to hold office. (124D) (1) This section applies in relation to the exercise of powers for the purposes of this Part of this Act. (2) A power vested in the Privy Council may be exercised by any two or more of the lords and others of the Council. (3) An act of the Privy Council shall be sufficiently signified by an instrument signed by the clerk of the Council. (4) An order or act signified by an instrument purporting to be signed by the clerk of the Council shall be deemed to have been duly made or done by the Privy Council. (5) An instrument so signed shall be received in evidence in all courts and proceedings without proof of the authority or signature of the clerk of the Council or other proof.

• (2) In section 125 of that Act (articles of government) for “the Secretary of State” (in each place where it appears) there is substituted “ the Privy Council ”; but nothing in this subsection requires further approval to be given for anything approved by the Secretary of State under that section before the commencement of this subsection.

• (3) In Schedule 7 to that Act (constitution of higher education corporations)—

• (a) at the end of paragraph 7 (appointments) there is added—

(8) If the number of independent members of the corporation falls below the number needed in accordance with its articles of government for a quorum, the Secretary of State is the appointing authority in relation to the appointment of such number of independent members as is required for a quorum

, and

• (b) in paragraph 18 (accounts) after sub-paragraph (2) there is inserted—

(2A) The corporation shall supply a copy of the statement to any person who asks for it and, if the corporation so requires, pays a fee of such amount not exceeding the cost of supply as the corporation thinks fit.

• (4) After that Schedule there is inserted the Schedule set out in Schedule 6 to this Act.

Further power of designation

72

• (1) In section 129 of the Education Reform Act 1988 (designation of institutions)—

• (a) for subsections (1) and (2) there is substituted—

(1) The Secretary of State may by order designate as an institution eligible to receive support from funds administered by a higher education funding council— (a) any institution which appears to him to fall within subsection (2) below; and (b) any institution which is, or is to be, conducted by a successor company to a higher education corporation. (2) An institution falls within this subsection if its full-time equivalent enrolment number for courses of higher education exceeds 55 per cent. of its total full-time equivalent enrolment number

, and

• (b) subsections (3) and (4) of that section are omitted.

• (2) An order in force immediately before the commencement of subsection (1) above designating an institution as falling within subsection (3) of that section shall have effect as if made under that section as amended by subsection (1) above.

• (3) In this Part of this Act “designated institution” means an institution in relation to which a designation made, or having effect as if made, under section 129 of that Act has effect.

Government and conduct of designated institutions

73

• (1) After section 129 of the Education Reform Act 1988 there is inserted—

(129A) (1) This section has effect in relation to any designated institution, other than an institution conducted by a company. (2) For each such institution there shall be— (a) an instrument providing for the constitution of a governing body of the institution (to be known as the instrument of government); and (b) an instrument in accordance with which the institution is to be conducted (to be known as the articles of government), each of which meets the requirements of subsection (3) below. (3) Those requirements are that the instrument— (a) was in force when the designation took effect; or (b) is made in pursuance of a power under a regulatory instrument, or is made under subsection (5) below, and is approved for the purposes of this section by the Privy Council. (4) In this section “regulatory instrument”, in relation to an institution, means any instrument of government or articles of government and any other instrument relating to or regulating the institution. (5) Where there is no such power as is mentioned in subsection (3)(b) above to make the instrument, it may be made by the body of persons responsible for the management of the institution and an instrument made by them under this subsection may replace wholly or partly any existing regulatory instrument. (6) If an instrument approved by the Privy Council for the purposes of this section— (a) falls within subsection (3)(a) above or was made in pursuance of a power under a regulatory instrument and, apart from this section, there is no power to modify it; or (b) was made by the body of persons responsible for the management of the institution, the instrument may be modified by those persons. (7) Either of the instruments referred to in subsection (2) above may be modified by order of the Privy Council and no instrument approved by the Privy Council for the purposes of this section may be modified by any other person without the Privy Council’s consent. (8) Before exercising any power under subsection (7) above in relation to any instrument the Privy Council shall consult— (a) the governing body of the institution, and (b) where there is such a power as is mentioned in subsection (3)(b) above to modify the instrument and the persons having that power are different from the governing body of the institution, the persons having the power, so far as it appears to them to be practicable to do so. (9) Nothing in this section requires further approval for any instrument approved by the Secretary of State for the purposes of section 156 of this Act, and references in this section to instruments approved by the Privy Council for the purposes of this section include instruments so approved by the Secretary of State. (10) In this section and section 129B “designated institution” means an institution in relation to which a designation made, or having effect as if made, under section 129 of this Act has effect but does not include any institution established by Royal Charter. (129B) (1) This section has effect in relation to any designated institution conducted by a company. (2) The articles of association of the company shall incorporate— (a) provision with respect to the constitution of a governing body of the institution (to be known as the instrument of government of the institution); and (b) provision with respect to the conduct of the institution (to be known as the articles of government of the institution). (3) The Privy Council may give to the persons who appear to them to have effective control over the company such directions as they think fit for securing that— (a) the memorandum or articles of association of the company; or (b) any rules or bye-laws made in pursuance of any power conferred by the articles of association of the company, are amended in such manner as they may specify in the direction. (4) No amendment of the memorandum or articles of association of the company (other than one required under subsection (3)(a) above) shall take effect until it has been submitted to the Privy Council for their approval and they have notified their approval to the company. (5) Before giving any directions under subsection (3) above the Privy Council shall consult the persons who appear to them to have effective control over the company.

• (2) Section 156 of that Act (government and conduct of certain further and higher education institutions) shall cease to have effect in relation to designated institutions.

Transfer of further education institutions to higher education sector

74

• (1) After section 122 of the Education Reform Act 1988 (orders incorporating higher education institutions maintained by local authorities) there is inserted—

(122A) (1) The Secretary of State may by order provide for the transfer of a further education corporation to the higher education sector if it appears to him that the full-time equivalent enrolment number of the institution conducted by the corporation for courses of higher education exceeds 55 per cent. of its total full-time equivalent enrolment number. (2) Where an order under this section is made in respect of a further education corporation, sections 124A and 125 of this Act shall have effect as if— (a) on the date the order has effect, the corporation were established as a higher education corporation, and (b) the Secretary of State were the appointing authority in relation to the first members of the higher education corporation. (3) In determining in pursuance of subsection (2)(b) above the number of members to appoint within each variable category of members, the Secretary of State shall secure that at least half of all the members of the higher education corporation as first constituted are independent members; and in this subsection “variable category of members” and “independent members” have the same meaning as in Schedule 7A to this Act. (4) On such date as may be specified in the order the corporation shall cease to be a further education corporation and become a higher education corporation and any member of the further education corporation who is not re-appointed by the Secretary of State in pursuance of subsection (2)(b) above shall cease to hold office on that date.

• (2) An order under section 129 of the Education Reform Act 1988 (designation of institutions for the purposes of the higher education sector) in respect of any institution may revoke any order in respect of that institution under section 28 of this Act.

Variation of trust deeds

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In section 157 of the Education Reform Act 1988 (variation of trust deeds, etc.) for subsections (1) to (3) (variations by Secretary of State in connection with institutions in the higher education sector or designated assisted institutions) there is substituted—

(1) An order of the Privy Council may modify any trust deed or other instrument— (a) relating to or regulating any such institution as is mentioned in subsection (2) below; or (b) relating to any land or other property held by any person for the purposes of any such institution. (2) The institutions referred to in subsection (1) above are— (a) any institution conducted by a higher education corporation; and (b) any institution in relation to which a designation made, or having effect as if made, under section 129 of this Act has effect, other than an institution established by Royal Charter. (3) Before making any modifications under subsection (1) above of any trust deed or other instrument the Privy Council shall so far as it appears to them to be practicable to do so consult— (a) the governing body of the institution; (b) where that deed or instrument, or any other instrument relating to or regulating the institution concerned, confers power on any other persons to modify or replace that deed or instrument, those persons; and (c) where the instrument to be modified is a trust deed and the trustees are different from the persons mentioned in paragraphs (a) and (b) above, the trustees.

Power to award degrees, etc

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• (1) The Privy Council may by order

• (a) specify any institution which provides higher education as competent to grant in pursuance of this section either or both of the kinds of award mentioned in subsection (2)(a) and (b) below;

• (b) specify any institution ... within the further education sector as competent to grant in pursuance of this section an award of the kind mentioned in subsection (2A) below.

• (2) The kinds of award referred to in subsection (1)(a) above are—

• (a) awards granted to persons who complete an appropriate course of study and satisfy an appropriate assessment, and

• (b) awards granted to persons who complete an appropriate programme of supervised research and satisfy an appropriate assessment,

and in this section “award” means any degree, diploma, certificate or other academic award or distinction and “assessment” includes examination and test.

• (2A) The kind of award referred to in subsection (1)(b) above is a foundation degree granted to persons who complete an appropriate course of study and satisfy an appropriate assessment.

• (2B) Where the Privy Council is considering whether to make an order under subsection (1) above specifying an institution as mentioned in subsection (1)(b) above, the Privy Council may not make the order unless—

• (a) the institution gives the Privy Council a statement setting out what it proposes to do as regards making arrangements for securing that any person granted an award under or by virtue of any power that would be conferred on the institution if the order were made (other than the power described in subsection (4A) below) has an opportunity to progress to one or more particular courses of more advanced study, and

• (b) the Privy Council considers that the proposals are satisfactory and are likely to be carried out.

• (3) An institution for the time being specified in such an order may grant any award of a kind mentioned in subsection (2)(a) or (b) or (2A) above which it is competent to grant by virtue of the order to persons who complete the appropriate course of study or, as the case may be, programme of supervised research on or after the date specified in the order.

• (4) An institution specified in such an order as competent to grant in pursuance of this section either or both of the kinds of award mentioned in subsection (2)(a) or (b) above may also—

• (a) grant honorary degrees, and

• (b) grant degrees to members of the academic and other staff of the institution.

• (4A) An institution specified in such an order as competent to grant in pursuance of this section the kind of award mentioned in subsection (2A) above may also—

• (a) grant honorary foundation degrees, and

• (b) grant foundation degrees to members of the academic and other staff of the institution.

• (5) Subject to subsection (5A) below, any power conferred on an institution to grant awards in pursuance of this section includes power—

• (a) to authorise other institutions to do so on behalf of the institution,

• (b) to do so jointly with another institution, and

• (c) to deprive any person of any award granted to him by or on behalf of the institution in pursuance of this section (or, in the case of an award granted to him by the institution and another institution jointly, to do so jointly with the other institution).

• (5A) An order under subsection (1) above specifying an institution as competent to grant in pursuance of this section only the kind of award mentioned in subsection (2A) above may provide that the institution's power to grant such awards does not include the power described in subsection (5)(a) above.

• (6) Subject to subsection (6A) below, it shall be for the institution to determine in accordance with any relevant provisions of the instruments relating to or regulating the institution the courses of study or programmes of research, and the assessments, which are appropriate for the grant of any award and the terms and conditions on which any of the powers conferred under this section may be exercised.

• (6A) An order under subsection (1) above specifying an institution as competent to grant in pursuance of this section only the kind of award mentioned in subsection (2A) above may provide that the institution is not to grant such an award to a person unless he was enrolled at the institution at the time he completed the course of study for which the award is granted.

• (7) Section 124D of the Education Reform Act 1988 applies in relation to orders under subsection (1) above as it applies in relation to the exercise of powers for the purposes of Part II of that Act.

Use of “university” in title of institution

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• (A1) Where—

• (a) power is conferred by any enactment or instrument to change the name of any educational institution or any body corporate carrying on such an institution,

• (b) the educational institution is a registered higher education provider, and

• (c) the power is exercisable with the consent of the Privy Council,

then, the power may be exercised so as to include the word “university” in the name of the institution and, if it is carried on by a body corporate, in the name of the body, but only if the Office for Students (instead of the Privy Council) consents to that exercise of the power.

• (1) Where—

• (a) power is conferred by any enactment or instrument to change the name of any educational institution or any body corporate carrying on such an institution, and

• (b) the educational institution is in Wales and is within the higher education sector,

then, if the power is exercisable with the consent of the Privy Council, it may ... be exercised with the consent of the Privy Council so as to include the word “university” in the name of the institution and, if it is carried on by a body corporate, in the name of the body.

• (1A) Subsections (A1) and (1) apply whether or not the educational institution would, apart from this section, be a university.

• (2) The reference in subsection (A1) or (1) above to a power to change the name of an institution or body includes any power (however expressed and whether or not subject to any conditions or restrictions) in the exercise of which the name of the institution or body may be changed; but the power as extended by subsections (A1) and (1) has effect subject to any such conditions or restrictions.

• (3) In exercising any power exercisable by virtue of this section to consent to a change in any name the Office for Students and the Privy Council shall have regard to the need to avoid names which are or may be confusing.

• (3A) In exercising its power to give consent under subsection (A1), the Office for Students must have regard to factors set out in guidance given by the Secretary of State.

• (3B) Before giving guidance under subsection (3A), the Secretary of State must consult—

• (a) bodies representing the interests of English higher education providers,

• (b) bodies representing the interests of students on higher education courses provided by English higher education providers, and

• (c) such other persons as the Secretary of State considers appropriate.

• (4) Any educational institution whose name includes the word “university” by virtue of the exercise of any power as extended by subsection (A1) or (1) above is to be treated as a university for all purposes , unless in that name that word is immediately followed by the word “college” or “collegiate”.

• (5) In this section, “English higher education provider”, “higher education course” and “registered higher education provider” have the same meaning as in Part 1 of the Higher Education and Research Act 2017 (see sections 83 and 85 of that Act).

• (6) For the purposes of subsection (1), an educational institution is in Wales if the institution's activities are carried on, or principally carried on, in Wales.

Financial years of higher education corporations

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• (1) If the Secretary of State directs that any financial year specified in the direction of the higher education corporations in Wales, and subsequent financial years, are to begin with a date specified in the direction, then—

• (a) the financial year of the corporations immediately preceding the year specified in the direction shall end immediately before the date specified in the direction, and

• (b) the financial year specified in the direction and subsequent financial years shall be each successive period of twelve months.

• (2) Section 124B(7) of, and paragraph 18 of Schedule 7 to, the Education Reform Act 1988 (financial years) shall have effect subject to this section.

• (3) In this section “higher education corporation in Wales” means a higher education corporation established to conduct an institution whose activities are carried on, or principally carried on, in Wales.

General

Duty to give information to the funding councils

79

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dissolution of Council for National Academic Awards

80

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Directions

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• (1) In exercising their functions under this Part of this Act, the HEFCW shall comply with any directions under this section, and such directions shall be contained in an order made by the Secretary of State.

• (2) The Secretary of State may give general directions to the HEFCW about the exercise of their functions.

• (3) If it appears to the Secretary of State that the financial affairs of any institution within the higher education sector have been or are being mismanaged he may, after consulting the HEFCW and the institution, give such directions to the HEFCW about the provision of financial support in respect of the activities carried on by the institution as he considers are necessary or expedient by reason of the mismanagement.

Part III — Miscellaneous and general

Joint exercise of functions

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• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) A relevant authority must, if directed to do so by the Secretary of State, make provision jointly with another relevant authority or with the Secretary of State for the assessment by a person appointed by them of matters relating to the arrangements made by each institution in Wales and Scotland which is within the higher education sector for maintaining academic standards in the institution.

• (2A) The power of the Secretary of State to give directions under subsection (2) above shall, as regards the Scottish Further and Higher Education Funding Council, be treated as exercisable in or as regards Scotland and may be exercised separately.

• (3) In this section—

• (a) “relevant authority” means the Commission for Tertiary Education and Research or the Scottish Further and Higher Education Funding Council, and

• (b) references to institutions within the higher education sector include institutions within the higher education sector within the meaning of Part II of the Further and Higher Education (Scotland) Act 1992.

Efficiency studies

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• (1) A person listed in an entry in column 1 of the table in subsection (1B) may arrange for efficiency studies to be promoted or carried out by any person in respect of an institution listed in the corresponding entry in column 2 of that table.

• (1A) “Efficiency studies” are studies designed to improve economy, efficiency and effectiveness in the management or operations of an institution.

• (1B) The table referred to in subsection (1) is—

Person	Institution
The Welsh Ministers	An institution in Wales within the further education sector.
The Secretary of State	An institution in England within the further education sector, other than a sixth form college
The Secretary of State	A sixth form college
The HEFCW	An institution within the higher education sector. A regulated institution for the purposes of the Higher Education (Wales) Act 2015 (including a provider designated under section 3 of that Act which is treated as being a regulated institution for the purposes of that Act).

• (2) A person promoting or carrying out efficiency studies at the request of a person listed in an entry in column 1 of the table in subsection (1B) may require the governing body of the institution concerned—

• (a) to furnish the person, or any person authorised by him, with such information, and

• (b) to make available to him, or any person so authorised, for inspection their accounts and such other documents,

as the person may reasonably require for that purpose.

Effect of agreements made before date of transfer

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• (1) This section applies where—

• (a) (apart from this section) any land or other property of a local authority would on any date (“the date of transfer”) be transferred under ...Part II of the Education Reform Act 1988 to the governing body of an institution within the further education sector or the higher education sector, and

• (b) at any time before that date the authority, the governing body of the institution and the governing body of any other institution which will on that date be an institution within the further education sector or the higher education sector have agreed in writing that the land or property should be transferred on that or a subsequent date to the governing body of that other institution.