Draft Energy Prices Act 2022 (Extension of Time Limit) Regulations 2026
(1 day, 11 hours ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I beg to move,
That the Committee has considered the draft Energy Prices Act 2022 (Extension of Time Limit) Regulations 2026.
It is a pleasure to serve under your chairmanship, Ms Vaz.
This Government are fully committed to fighting people’s corner to tackle the cost of living crisis. Across the energy system and more widely, we are acting on this as a matter of priority. A number of steps were taken in last year’s Budget, and we have since gone further. At the Budget, alongside several positive changes to help working people with the cost of living, the Chancellor announced that we would remove costs from energy bills from this month. I want to be clear what those costs are. First, we are closing the Energy Company Obligation scheme, removing its costs from bills and instead funding home upgrades for energy efficiency via the warm homes plan. Members may recall that recent regulations extended ECO4 by nine months, but only to enable an orderly closure, with no costs on bills, from this month.
Secondly, we transferred 75% of the renewables obligation scheme costs attributable to domestic energy supply to instead be funded by the Exchequer. The core renewables obligation incentive for relevant generators. These were principled decisions to fund more of the investment we need from public spending rather than bills, which is the right and progressive thing to do. It is thanks to those decisions that typical household energy bills fell by 7% or more than £100 from 1 April.
Let me briefly set out how we delivered the removal of the RO costs from bills, before I come on to how the regulations will enable that to continue. Under the RO, energy suppliers purchase certificates from relevant renewables generators, and previously recovered the full cost of those purchases from consumers. From 1 April, suppliers have been required to recover only 25% of those costs from domestic consumers. For domestic consumers on standard variable tariffs, Ofgem’s energy price cap, published on 25 February, factored in reduced policy costs reflecting the RO changes that we are considering this morning. As a result, the price cap has fallen by 7% or £117, to £1,641 per year for a typical dual-fuel customer paying by direct debit. It will remain held down at that level until the end of June.
In addition, the Government issued a legally binding direction to suppliers on 18 March requiring them to also pass on the full savings to domestic consumers on fixed tariffs. With suppliers no longer recovering 75% of the cost of the RO from household energy bills, we are instead providing equivalent monthly grant funding. We acted quickly to deliver this funding and the associated consumer savings, using an existing power in the Energy Prices Act. That power needs to be extended via regulations to avoid its expiry. It is those regulations that we are discussing today.
The regulations do not give the Secretary of State any new powers, but they ensure the spending power we are using to enable the consumer savings remains available. Legally we can extend the time limit on this power only by six months at a time, so the regulations extend them from 25 April to 25 October. While I expect to need to seek a further extension, I can assure members that the Department is working on primary legislation to provide a more permanent solution when parliamentary time allows.
I would like to note that the position is slightly different in relation to Northern Ireland, where the Executive are delivering a comparable policy. I have been working with the Minister for the Economy in Northern Ireland, and at her request we have laid separate regulations to support delivery there.
Before I close, I will say that we are in a different international environment to when the energy bill reduction was planned in the Budget in November. That was noted by the Secondary Legislation Scrutiny Committee in the other place. It is now even more important that we have acted to reduce energy bills by more than £100, and that bills will stay capped down at a lower level until the end of June.
Whatever the challenges that lie ahead, 75% of RO costs will remain off domestic energy bills for the next three years. We have already gone further in supporting vulnerable heating oil consumers in response to events in the middle east, and we continue to monitor those events closely to ensure we are ready to be both responsive and responsible. The regulations are a simple time limit extension, but are essential to the ongoing removal of 75% of RO costs from domestic energy bills and I commend the draft regulations to the Committee.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship this morning, Ms Vaz.
I note at the outset that the Opposition will not divide the Committee on this statutory instrument. We do not oppose the principle of reducing the burden of policy costs on household energy bills. However, the fundamental question this statutory instrument raises is one of transparency. Are the public being given an honest account of what the Government’s policies do? Moving some of the renewables obligation funding to be paid from the Exchequer does not eliminate a cost: it relocates it. The £70-odd saving that Ministers claim to be making is still being paid by all our constituents: they are paying it through their tax bill, rather than their energy bills. As Martin Lewis noted, that is the mechanism behind the majority of the advertised £150 saving. That is not nothing, but it is not quite the windfall it is presented as either.
The huge subsidies that entitle some windfarm owners to three times the market price of the power they generate still flows to energy developers, all funded by the taxpayer. Crucially, the savings that the Labour Government have put forward do nothing to cut bills for businesses, which are seeing their network costs double thanks to the Government’s net zero policies and are getting no support from their big energy bill package.
The regulations extend the section 13 powers of the Energy Prices Act 2022 by a further six months to October 2026. The Government have been clear that primary legislation will follow, and the Minister repeated in his speech this morning, when parliamentary time allows. Well, a King’s Speech is in the diary for next month, so all eyes will be on it to see if that appears. I am sure that the Minister will not be tempted to confirm or deny items in the King’s Speech this morning, but if this is not in it, questions will be asked. That prompts a reasonable question about whether the Minister can offer assurances about the timetable. Does he expect it to be this year, next year or at some point before the next general election? Can he confirm that the extension in the regulations will not become a pattern of repeated deferral?
It is right to support measures that ease the cost of living. What is equally important is that the public are given a clear and honest account of how those measures work and who will ultimately foot the bill. As we all know, a very great lady once said that there is no such thing as public money, only taxpayers’ money.
The Chair
To clarify, any Member can attend a Delegated Legislation Committee even if they are not a member of the Committee.
Gareth Snell
That is a nice introduction, Ms Vaz, and it is a pleasure to serve under your chairmanship.
I have no issue in principle with the regulations, which extend the powers of the Secretary of State. The issue I want to raise, given this opportunity, is the other aspects of the Energy Price Act 2022 on industrial energy, which are also extended by virtue of extending the timescale for the legislation. The Minister will know that I have been persistent in trying to seek a meeting with him, which I have not been able to secure. On the last attempt we were told that his diary was too busy for a meeting. I thought, therefore, that I would come along and detain the Committee for 20 minutes this morning for a meeting that we could have had privately in the Department. I apologise to other members of the Committee.
The Minister will know that section 9 of the Energy Prices Act allows for the reduction of energy charges for non-domestic customers in Great Britain. That is industrial energy which keeps the lights on in factories, and allows us to make things, build things and do things. It is the life source of British manufacturing. The Minister will also be acutely aware that too many businesses in this country, especially those in foundational sectors, are unable currently to meet the cost of their gas and electricity because of the price of industrial energy.
For reference, two weeks ago the price of gas was 140p per therm. It is currently trading at between 113p and 115p per therm. To put that into context, in 2020, before the various shocks and energy crises, it was 47p per therm. Gas-intensive manufacturers are today paying roughly—including other costs that are part of the measures the Minister mentioned—three times what they were paying. We cannot make glass, bricks, cement, paper, steel or—crucially for me—ceramics without a credible and affordable supply of industrial gas. There are also challenges with electricity pricing.
I am sure that the Minister will respond to what I am saying by talking about the supercharger scheme, and will note the excellent extension of the scheme from a 60% reduction to a 90% reduction, but that covers only 500 of the most energy-intensive industries in the country; 5,000 others could be included, but unfortunately are not, so while we are seeing an increase in support for some of the industry, it is very narrow and does not support most of the manufacturing in this country. I am sure the Minister will also reach into his big bag of tricks to talk about the British industrial competitiveness scheme, the consultation for which has only just gone out. That scheme was promised in last year’s Budget and will almost certainly not be in place until late 2027.
The Minister wants to extend the powers under the Energy Prices Act using today’s statutory instrument, and I think that is a good thing, but I would ask him to do three things. The first is to think about what other parts of the Act he will use when he has extended those powers. When he has extended the powers of the Secretary of State until the end of this year, will he use the powers under section 9(1) by regulation to reduce charges for non-domestic energy supply? Will he use the powers that are extended under this SI to reduce the amount that would be otherwise charged for the GB non-domestic gas supply by licensed gas suppliers?
The Minister could, if he wanted to, under section 13(3)(a), give financial assistance to non-domestic users of energy, whether it be gas or electricity, using powers that are in the Act that are being extended by today’s SI. Under section 13(2),
“The Secretary of State may take such other steps as the Secretary of State considers appropriate in response to the energy crisis.”
I think it is quite clear that we are in an energy crisis. We are facing enormously high energy costs, not just in our own homes but in the factories that employ thousands of people across this country in highly skilled, proud, working-class communities.
Following today’s extension to the powers under the Energy Prices Act, the Government will have the power to meet the demands being made of them by various sectors—not just ceramics but glass, steel, bricks, cement, lime, paper; all the things that we need—to make an intervention as soon as the SI is passed. The Minister could go back to his Department and say, “We have the power, the political will and an interest in doing so; therefore we are going to make regulations.” He could say to the 4,500 businesses that are not covered by the industry supercharger scheme, “Here is a mechanism by which we can simply put you in that scheme.”
Gareth Snell
It is within the powers that are being extended by today’s SI. The Minister rightly talks about the SI’s impact on the power of the Secretary of State to vary domestic bills, but the Act is quite comprehensive. What is being extended today by the SI is a suite of powers that are available to the Secretary of State to undertake significant market intervention on a range of fronts in the next six months—it is covered by the SI that is before us—to make life easier for businesses, manufacturers and heavy industries in my constituency and, I would wager, in yours, Ms Vaz. I know you have brick manufacturers who face the same industrial energy crisis—[Interruption.] As does the shadow Minister in his constituency.
Given the powers that are being granted to the Secretary of State under this SI, companies around the country could be given help and support. I therefore ask the Minister, once he has granted the Secretary of State additional powers through the SI before us, will he go back to his Department and come up with a scheme, a plan and a package of support for those non-domestic users of gas and electricity that are not covered by the industry supercharger scheme that will come into place well before the British industrial competitiveness scheme is floated, and allow some breathing space for those manufacturers who, frankly, are the lifeblood of the economy in so many constituencies and who, in places like Stoke-on-Trent, employ thousands of people?
Claire Young (Thornbury and Yate) (LD)
It is a pleasure to serve under your chairship, Ms Vaz. The extension of this statutory instrument is important to ensure that the Government will continue to be able to support households with energy costs. Given the volatility of fossil fuel prices and Trump’s reckless and illegal war with Iran, it is important that legislative tools are available to support people with their energy bills.
However, the Government need to act to support such households. While the announcement in March to help households using heating oil through the crisis resilience fund was welcome, the Government need to continue to support them. My Liberal Democrat colleagues and I have consistently called on the Government to zero-rate VAT on heating oil for three months and to create a price cap mechanism for off-gas households. They should not be left unprotected and vulnerable to soaring prices.
The hon. Member for Stoke-on-Trent Central made important points about large, energy-intensive industries. The Government should take the opportunity that the instrument offers by providing support for small or microbusinesses to cover the cost of their renewables obligations to energy suppliers, lowering bills and supporting businesses with soaring prices during volatile and uncertain times. Families and business owners are struggling and are worried about what the conflict with Iran will mean for their bills. We need to see real and continued support from the Government to lower energy bills and help those who need it most.
Martin McCluskey
I will turn first to the comments made by the official Opposition, and the call to scrap the renewables obligation scheme. I want to put it on the record that it is simply not realistic to scrap that scheme. We took a deliberate decision to remove 75% of the RO from bills and to move that on to general taxation. The shadow Minister may oppose that move, but it is a principled decision that we have taken in order to spread the burden of those renewables obligations more widely, to make sure that those with the broadest shoulders are paying more, rather than it falling just on bill payers, and to maintain the incentive for renewable generators in the scheme at the same time.
The shadow Minister will know that the RO supports 25,000 generation stations, which accounts for approximately 30% of UK electricity generation. Abandoning the RO would not just send a signal to industry that we are not a reliable partner for investment but potentially put at risk our electricity generation, which would be deeply irresponsible. We will take responsible action to move this on to general taxation, while at the same time reducing the burden on bill payers, as people would expect the Government to do, not just because of the situation in the middle east but because of the situation that we faced before that with the rising cost of living.
I deeply admire the work that my hon. Friend the Member for Stoke-on-Trent Central does to advocate for his constituents. I am not aware of him having requested a meeting with me. He may have requested a meeting with either the Minister for Industry or the Minister for Energy. My brief covers only domestic consumers, not industry, but I will happily ask my hon. Friends the Minister for Energy and the Minister for Industry to meet with him to discuss the issues that he has raised in Committee this morning. He made a number of points about the increasing costs on industry, which as Members would expect are being actively discussed in the Department as we establish what support we may be able to offer, not just to domestic consumers, which is what we are dealing with this morning, but to non-domestic consumers.
The Government were taking significant action to reduce bills prior to the situation that has arisen in the middle east, but as hon. Members have mentioned, the rising cost of energy due to what is happening in Iran continues to dominate thinking in the Department. As hon. Members have mentioned, we have already come forward with proposals and help for those using heating oil, and all other contingencies are being kept under review to ensure that we support people through this situation as they face rising energy prices.
Question put and agreed to.
Draft Aviation Safety (Amendment) Regulations 2026
(1 day, 11 hours ago)
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The Parliamentary Under-Secretary of State for Transport (Keir Mather)
I beg to move,
That the Committee has considered the draft Aviation Safety (Amendment) Regulations 2026.
It is a pleasure to serve under your chairship, Ms Lewell. The draft regulations were laid before the House on 24 February. The instrument has two objectives. First, it amends article 71 of the assimilated basic regulation to give the Civil Aviation Authority the flexibility to grant exemptions. Secondly, it removes an unused criminal sanction to allow twin-engine aircraft to operate over longer distances, in line with international best practice.
Currently, the CAA may grant an exemption from the basic regulation implementing rules only under two scenarios: urgent unforeseeable circumstances and urgent operational needs. That requirement limits the CAA’s ability to support innovation and to allow exemptions that would enhance safety at regular and foreseeable events such as festivals.
I am aware of the concern raised by the Transport Committee that this amendment to article 71 of the basic regulation represents a reduction in regulatory protection, but I can assure its members that the CAA has developed a robust framework to ensure that exemptions granted under article 71 will not degrade safety. Each request will be risk-assessed by the CAA’s aviation safety experts and granted only where no other regulatory alternative exists and safety is assured. Just because a request has been granted once, that will not set a precedent for future exemptions. The criteria for exemption are deliberately strict, maintaining existing requirements on aircraft noise, fuel venting and engine emissions, as well as ensuring that decisions do not create unreasonable or unsafe working conditions.
That approach will enhance safety. For example, to facilitate the safe arrival and departure of large numbers of helicopters at events such as Royal Ascot and Formula 1 at Silverstone, the CAA currently recommends that a temporary air traffic control service is set up. However, full compliance with the existing legislation would be disproportionate to the service provision and the period of the event, as that legislation was developed with a permanent service in mind. Currently, because such an event is foreseeable, the CAA cannot grant exemptions, even though that would clearly enhance safety by enabling safer management of helicopter operations.
The amendment will also support innovation. Currently, technological developments such as beyond visual line of sight drone flights in non-segregated airspace are hard to test, as they are considered neither urgent nor unforeseeable under existing regulations.
The second amendment in the instrument removes a criminal sanction in the Air Navigation Order 2016.
Peter Fortune (Bromley and Biggin Hill) (Con)
I welcome the fact that the regulations allow for innovation, and especially things such as vertical take-off and unmanned flights. However, given that Biggin Hill airport is in my constituency, can the Minister say what provisions there are to ensure that local communities in smaller aerodrome areas are communicated with?
Keir Mather
The hon. Gentleman raises an important point about community consultation, and the CAA’s design of noise policy takes it incredibly seriously. These exemptions are designed to be used only when other regulatory avenues are not available, but we expect all operators to take noise considerations into account. I know how important that is to his constituents, and it will be part of this work going forward.
As I said, the second amendment in the instrument removes a criminal sanction in the Air Navigation Order 2016. That will enable the introduction of internationally standardised extended diversion time operations later this year in the Aviation Safety (Amendment) (No. 2) Regulations 2026. Those rules cannot be introduced while the criminal sanction remains attached, as the powers in the Retained EU Law (Revocation and Reform) Act 2023 that we would need to use expire in June this year. The CAA has never used this sanction and has other regulatory tools to ensure compliance, including revoking approvals or limiting air operator certificates. On the wider powers gap in relation to criminal sanctions, the Department is aware of the issue, and we are reviewing whether existing powers on the statute book may be able to fill that gap. We are also considering introducing primary legislation when parliamentary time allows.
I hope I have adequately reassured Members that these provisions are proportionate, incentivise innovation and defend our robust record on aviation safety. I therefore commend them to the Committee.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Ms Lewell. As the Minister invoked a couple of events in his speech, I will go for a different safety first approach by drawing the Committee’s attention to my entry in the Register of Members’ Financial Interests in relation to Silverstone Circuits Ltd and Ascot racecourse, and to my chairmanship of the all-party parliamentary group on Formula 1 and motorsport. I do not believe that our debate is materially to do with those events, but as the Minister invoked them, I thought it best to draw the Committee’s attention to those points.
Aviation safety underpins the whole of our aviation sector, and the necessity of getting it right is of the utmost importance to those in the industry and the public. It is therefore welcome that we have seen continual improvements over the last few decades in the United Kingdom’s overall aviation safety. However, as noted in the CAA’s most recent annual report, the accidents we have seen must serve as a sobering reminder that safety must never be taken for granted. I reference that because the measures we are debating appear to broadly strike a sensible balance between upholding safety and allowing some loosening of existing restrictions.
Considering the regulations as one, the fundamental question is about the CAA’s capacity and ability to deal with the changes. Can we be confident that it will maintain the strong standards associated with these rule changes? The alterations proposed to article 71 of the basic regulation appear to promote proportionate deregulatory change, including by opening the possibility of extending exemptions for testing new technologies and for several one-off events. Critically, those changes received support from stakeholders when consulted on by the CAA, and that was followed up in a subsequent consultation to address any concerns.
If safety can be maintained, it is clearly welcome to have measures in place that encourage innovation and that could allow air navigation service providers to offer radio assistance for events, which appears to be an upgrade on existing rules. As the Government’s impact assessment notes, that should reduce barriers to entry for businesses in some circumstances, which should be welcomed. However, given the comment that those circumstances must be exceptional for an exemption to be granted, is the Minister able to answer the concerns set out by the Secondary Legislation Scrutiny Committee that, as these exemptions would be used for day-to-day activities, they are not in fact exceptional? I am not contesting the principle of the regulations, but is the Minister content that the terminology “exceptional” will support the day-to-day activities the CAA believes are safe? Also, has the Department for Transport engaged with the CAA about its capacity to process these applications? Is it comfortable that there is the capacity to do this work?
The second element of the regulations, regarding the removal of the criminal sanctions, also deserves consideration. Although the sanctions have never been used, can I get an assurance from the Minister that the CAA believes they would never be used in the future and that the existing rules relating to threshold distances are sufficient to stop unsafe behaviour? We recognise the need for the regulations to be altered, given other changes the CAA is considering, but is there a clear assurance that there will be no reduction in safety because of this change?
It is right to support measures that uphold safety, while also allowing the sector greater freedom to participate in activities the CAA believes to be safe. What is paramount, though, is that the regulator continues to ensure that all such activities are safe, so that we can maintain confidence in the British aviation sector, of which I am sure all Members of this House are already rightly proud.
Olly Glover (Didcot and Wantage) (LD)
It is a pleasure to serve under your chairship once again, Ms Lewell. I welcome the Minister’s comments, and it is good that he is aware of some of the concerns about the proposed changes to article 71 and some of the findings from the consultation, but can he go a little further? What he says about the CAA not using these provisions too casually is important, but what will be done—to answer the age-old question of who watches the watchers—to ensure that the CAA is using the powers in the regulations sensibly rather than disproportionately? I agree with the shadow Minister’s comments. The Liberal Democrats are broadly inclined to support the regulations, but we would like to hear a little more from the Minister about what assurances can be given that these new powers will not be abused.
Keir Mather
First, I thank the shadow Minister for his response, and I apologise for being accidentally pointed in the references I made to the equestrian and automotive activities that take place in his fantastic constituency.
To respond to points the hon. Gentleman made, may I first thank him for his continued support for proportionate deregulatory measures that do not compromise aviation safety? Although we can trade differing points of view on political ideology in this House, aviation safety is something we are united on and committed to enhancing, irrespective of party.
I can confirm that we are confident in the capacity of the CAA to manage this process effectively. I am cognisant of the points raised by the shadow Minister and the Lib Dem spokesperson about the DFT having to exercise robust oversight over these processes and to liaise closely with the CAA to ensure that it is using these powers proportionately.
The shadow Minister asked me to say a little more about what we mean by “exceptional”. These exceptions will be granted only when there is no other reasonable way for the applicant to achieve the aims that have been put forward. To give some examples, I refer him to the CAA’s draft policy framework, which sets out that exemptions will be granted only when the desired objective cannot be achieved by other means, and the CAA will not grant exemptions solely for cost. The policy contemplates granting exemptions in situations where, for example, a high standard of safety can be maintained and where there is an urgent need for the exemption to be granted. I can therefore assure hon. Members that this is a limited, specifically delineated exemption, and we believe that the CAA has the right resources to institute it effectively.
I thank all hon. Members for their contributions to the debate. The safety of aviation and the travelling public is a priority for this Government and across the House. The DFT is committed to ensuring that aviation remains safe, and these regulations represent a further step in achieving that. I therefore commend the draft instrument to the Committee.
Question put and agreed to.
Draft Buckinghamshire Council (Adult Education Functions) Regulations 2026
Draft Surrey County Council (Adult Education Functions) Regulations 2026
Draft Warwickshire County Council (Adult Education Functions) Regulations 2026
(1 day, 11 hours ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Andrew Western)
I beg to move,
That the Committee has considered the draft Buckinghamshire Council (Adult Education Functions) Regulations 2026.
The Chair
With this it will be convenient to consider the draft Surrey County Council (Adult Education Functions) Regulations 2026 and the draft Warwickshire County Council (Adult Education Functions) Regulations 2026.
Andrew Western
It is a pleasure to serve under your chairmanship, Sir John. I am very grateful for the opportunity to debate these three statutory instruments, which were laid before the House on 25 February 2026 under the Cities and Local Government Devolution Act 2016. If they are approved, the Department for Works and Pensions will transfer adult education functions and the associated adult skills fund to these local areas for the start of the new academic year, 1 August 2026. These local areas will then have the freedom to use their adult skills fund to help their residents meet their skills needs, fulfil their potential and contribute to the growth of their region.
Since 2018, a portion of the adult skills fund has been devolved to local bodies who have exercised control over the spending in their area. For the most part, those organisations have been combined authorities, although functions and funding were devolved to Cornwall council a year ago.
The previous Government agreed devolution deals with the three local authorities we are considering today in March 2024. Those deals, taken forward by this Government, committed to full devolution of the adult education budget, now called the adult skills fund. That was to be exercised from academic year 2026-27, subject to readiness conditions and parliamentary approval. It has been judged that all three authorities have demonstrated readiness to acquire functions, and therefore these instruments are the final step in ensuring that they are able to deliver from August this year.
The English Devolution and Community Empowerment Bill will confer the same functions on strategic authorities to be exercised from at least one full academic year after the authority’s establishment. The package of these instruments and that Bill will increase the percentage of the adult skills fund that is devolved from 67% to 76%.
Six further areas agreed devolution deals through this Government’s devolution priority programme. The Government are going through the legislative process to form these areas, with the intention that they will deliver adult education functions from August 2027, subject to ministerial approval. Taken together, those actions deliver on the Government’s commitment to empower local leaders and unlock growth.
The adult skills fund supports millions of adults across England to develop the skills they need to equip them for work, an apprenticeship or further learning. We know that local areas are best placed to identify what their local people, communities and businesses need. Strategic authorities decide how they spend their funding to deliver opportunity and growth in their area. They will be able to respond in a more agile way to local priorities and emerging challenges and to address any barriers more effectively.
Local areas can apply the flexibility that devolved adult skills funding functions offers, for instance to identify adults in their region who are most in need and invest more funding to support those groups. They can work directly with employers, training providers and other local partners to commission new provision to meet local needs and set funding rates that incentivise the delivery of provision that offers the most positive impacts for their region.
Within that local flexibility, strategic authorities must offer free courses for adults to deliver national statutory entitlements in English, maths, digital courses, level 2 and 3 qualifications for those who do not yet have those skills and free courses for jobs. This funding provides an essential stepping stone for adults with the lowest skills. I recognise that the nature of skills challenges, and the solutions, will be different in every region, and I am pleased that three new areas are poised to take the opportunities and develop new thinking and priorities for the adult skills fund in their areas.
If the statutory instruments are approved, Buckinghamshire, Surrey and Warwickshire will be responsible for managing their adult skills funding allocations efficiently and effectively to deliver for their local residents. Each area has consented to the transfer of these powers and to the making of these statutory instruments. They have also provided assurances that permanent skills teams are in place to manage delivery effectively. They have each developed a strategic skills plan, setting out how they will use their devolved adult skills funding to meet key priorities.
I can also confirm that, on the basis of the evidence submitted, Ministers have concluded that the statutory tests have been met. Each area has given its consent and demonstrated that devolution is likely to improve the economic, social and environmental wellbeing of the people who live and work in the region. A report has been laid before Parliament explaining how these conditions have been met. I would like to take this opportunity to thank all our partner organisations and, in particular, colleagues at Buckinghamshire council, Surrey county council and Warwickshire county council for their expertise and input in getting to this important milestone.
To conclude, these statutory instruments will give these three authorities the opportunity to shape their adult education provision, address local barriers, focus provision to meet local needs, enhance economic growth and bring greater prosperity to their areas. I commend the regulations to the Committee.
Sir Ashley Fox (Bridgwater) (Con)
It is a pleasure to serve under your chairmanship, Sir John. These three sets of draft regulations transfer responsibility for adult education and skills funding from the Secretary of State to three local councils. The aim is to bring decisions on education closer to the communities they serve.
The decisions we make on adult education and skills are important; a skilled workforce is essential for economic success. With technologies such as AI transforming the jobs market, it is crucial that people can retrain, upskill and re-enter the workforce as industries change. We know that, when funding is well targeted, more adults take up courses, particularly in sectors with real skills shortages.
The Minister will be aware, though, that councils are stretched and facing pressures on budgets and services. If we devolve responsibility without proper support, we risk letting adult education fall by the wayside. What measures will the Minister therefore take to ensure that the services are provided and that the funding he is devolving is well spent? What checks will he apply?
The Minister will also be aware that Surrey county council is being reorganised. He is proposing to devolve funding for adult education and skills to Surrey county council from 1 August this year, but I believe I am right in saying that, from 1 April next year, it will be replaced by two councils: East and West Surrey. What steps will he take to ensure that those new councils can deliver quality services for local residents?
The Conservatives are proud of our record on education and skills over our previous period in Government; we left rising standards in schools, improved attainment and expanded apprenticeships, but the job is not finished. Skills policy must work for adults as well as for young people, so we accept that there is more to do. We will do our job of scrutinising the Government: supporting policies that work and holding them to account on policies that do not.
Mr Will Forster (Woking) (LD)
It is a pleasure to serve under your chairship this afternoon, Sir John. I will speak to the statutory instrument focused on Surrey, my constituency of Woking being foremost in my mind. That statutory instrument transfers certain adult education functions from the Secretary of State to Surrey county council as part of the Government’s devolution agenda. From the 2026-27 school year, Surrey county council would therefore take responsibility for delivery of those education and training functions for people aged 19 and above, including local learning priorities, managing tuition support and other such things.
The Liberal Democrats have concerns about the lack of clarity around how the devolved powers will work in practice, and I would welcome the Minister’s thoughts on that. Does Surrey county council have the necessary capacity, resources and structures to deliver effectively when, as we know, they have significant financial pressures? The council was mentioned during the debate we had yesterday on special educational needs and disabilities, and, as was highlighted, the Secretary of State for Education is concerned about its children’s services and its offer for young people with SEND.
In particular, will the Minister explain why the Government are devolving the powers to Surrey county council in the financial year 2026-27, at the end of which the council will be abolished? That provides no certainty. He is the Minister for Transformation, but transformation happens year after year. Surely this decision can wait for at least one year until East Surrey council and West Surrey council are established and can take on new responsibilities.
Manuela Perteghella (Stratford-on-Avon) (LD)
It is a pleasure to serve under your chairship, Sir John. The regulations for Warwickshire county council are an opportunity to move real responsibility in the right direction: out of Whitehall and into Warwickshire. It is right that adult education functions sit with Warwickshire county council, giving local leaders far more say over skills, funding and provision.
However, we need to be honest about the context. Warwickshire is undergoing local government reorganisation, which will be followed by devolution and membership of a combined authority. The county council will not exist in a few years, and new unitary councils or a future strategic authority will inherit the proposed responsibilities mid-transition. That creates potential risk. Powers can be devolved quickly, but capacity takes time to build. If the change is done without proper support, new authorities will be left trying to deliver complex skills systems while establishing and reorganising themselves as new authorities. I would welcome the Minister’s reassurance on that.
Furthermore, my hon. Friend the Member for St Neots and Mid Cambridgeshire (Ian Sollom) tabled amendments to the English devolution Bill to strengthen local leadership in skills planning, including in adult education, which would have ensured that strategic authorities and employers work together, align boundaries properly and jointly shape local priorities. I hope that the Government will look at that important issue as local government reorganisation progresses. In conclusion, decision making should sit closer to the people those decisions affect, with local authorities given the tools and support to deliver, not just the responsibility.
Andrew Western
I thank colleagues for their broad support for the principle of more localised decision making and the flexibility it brings to local areas to shape the delivery of skills to meet the needs of the local labour market and community. Ordinarily, I would respond separately to each Member who has contributed, but the theme of all the questions was accountability, readiness and the practicality of the three local authorities, and in some cases the individual areas, delivering adult education provision from as early as this academic year.
It is worth acknowledging the question asked by both the Opposition spokesperson and the hon. Member for Woking about the proposed future shape of Surrey, which will be split into two local authority areas. The Government recognise that the change may present challenges, with a new system and new local authorities to work with. However, at the same time, the pressing need for local decision making means that we are minded at the moment to make arrangements for a new body in the form of a foundation strategic authority. That will ensure that we can continue to deliver this through the local prism and that residents across the whole of Surrey, including key stakeholders and partners, will have certainty that the transition will be seamless, not just in terms of the devolution we are talking about now, but in terms of the new structure of two local authorities.
On the question of accountability and readiness more broadly, and how we would satisfy ourselves that local areas were behaving wisely in the decisions they take in this space, it is perhaps important to recognise that accountability arrangements for devolved organisations are set out in the English devolution accountability framework. As part of that, local areas with devolved powers are required to submit annual assurance reports to the Department for Work and Pensions and to publish them on their own organisation’s website. Those reports set out what a devolved area has delivered against its strategic skills priorities over the previous academic year. They include an assessment of key outcomes, local partnership work, achievements, challenges and lessons learned.
Key data that local areas are expected to report against include adult skills, data on spend and the number of learners in their local areas taking up statutory entitlements. Skills England uses that information to undertake annual skills stocktakes, which each local area can use to discuss key findings, including how many issues can be addressed.
However, if significant or persistent issues are identified, the Government would take further action. That could include undertaking a further diagnostic review or, in serious cases, escalating to the Ministry of Housing, Communities and Local Government, which is able to intervene under measures set out in the Local Government Act 1999. I think we would all hope to not be in that position, and my view is that it is unlikely, but we need to be mindful that this is a significant change alongside the other significant changes that Members have mentioned. For instance, I recognise that the position on Warwickshire is not yet fully settled, but we anticipate changes. We have come up with an option to enable continued delivery in the Surrey area, and we would hope to work through something similar for Warwickshire.
On balance, I respectfully disagree with colleagues who propose a delay, because I want to get these powers down to the best possible local footprint so that areas continue to have a greater say in shaping decisions in their region. On that basis, I commend to the Committee the regulations pertaining to Surrey, Warwickshire and—how could I forget—Buckinghamshire.
Question put and agreed to.
DRAFT SURREY COUNTY COUNCIL (ADULT EDUCATION FUNCTIONS) REGULATIONS 2026
Resolved,
That the Committee has considered the draft Surrey County Council (Adult Education Functions) Regulations 2026.—(Andrew Western.)
DRAFT WARWICKSHIRE COUNTY COUNCIL (ADULT EDUCATION FUNCTIONS) REGULATIONS 2026
Resolved,
That the Committee has considered the draft Warwickshire County Council (Adult Education Functions) Regulations 2026. —(Andrew Western.)